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Traffic tickets lead to huge spike in black Chapter 13 filings

Thursday, Sep 28, 2017

* Chapter 13 filings per 1,000 residents - black census tracts vs. white census tracts in Chicago

* Pro Publica looked into what’s going on

Because of a boom in Chapter 13 filings, the U.S. Bankruptcy Court for the Northern District of Illinois, which includes Chicago, had more consumer filings in 2015 than any other district in the country.

Almost exclusively fueling this rise are residents of the district’s black communities, where the rate of filings has doubled since 2009. This racial disparity isn’t unique to the Chicago area, but there’s hardly anywhere else in the country where the gap is quite so wide. Even controlling for income, the odds of a black debtor in the Northern District of Illinois choosing Chapter 13 instead of Chapter 7 were about four times as high as those of a white debtor. And, as we found nationally, black debtors were less likely to successfully complete their Chapter 13 plans and have their debts discharged.

Why this is happening can be traced to the sort of run-of-the-mill financial hit many Americans face: traffic-related tickets. In Chicago, the failure to pay such tickets can result in a suspended driver’s license or impounded car, crucial lifelines to many low-income families.

In our analysis, we note that the rise in Chapter 13 filings has mainly been driven by black, low-income debtors unable to pay tickets owed to the City of Chicago. By filing under Chapter 13, these people are trying to keep their cars or licenses. Chapter 13 stops seizures and suspensions as long as debtors can keep up payments, but the data shows that most can’t. We also found that the Semrad Law Firm, also known as DebtStoppers, played an outsized role. The firm’s clients are largely black and overwhelmingly file under Chapter 13. From 2012 through 2015, DebtStoppers accounted for about 40 percent of Chapter 13 filings by debtors who lived in mostly black areas.

Wow.

And if you click here for the whole study, you’ll see that Chapter 13 discharge rates are lower for black debtors than for whites. So, they’re staying in debt.

- Posted by Rich Miller        

24 Comments
  1. - walker - Thursday, Sep 28, 17 @ 2:15 pm:

    Nightmarish scenario.


  2. - Fax Machine - Thursday, Sep 28, 17 @ 2:19 pm:

    Same day that Alderman Ray Lopez called fot the City to hire 50 “Super Ticket Writers”


  3. - Precinct Captain - Thursday, Sep 28, 17 @ 2:30 pm:

    ==- Real - Thursday, Sep 28, 17 @ 2:28 pm:==

    Not unlike Ferguson and many other places.


  4. - Pot calling kettle - Thursday, Sep 28, 17 @ 2:33 pm:

    This only the latest in a long series of studies showing how the deck continues to be stacked against black people. And yet, when someone stands up (or takes a knee) to draw attention to the long list of barriers put in front of black people, they are called (reverse) racists or disrespectful.

    We have the data, we know where the bias is, when will we do something to turn this around?


  5. - PatchAdams - Thursday, Sep 28, 17 @ 2:34 pm:

    i got three cell phone tickets in a month during a particularly busy time in late 2014. the court dates were never mailed to me and a few months later i got letters in the mail saying i owed over $600 per ticket ($1800 total!) (500 and change per plus interest) from the city of chicago. i paid, it sucked. they threatened to take away my license if i didn’t pay. the next AG or the feds should look into this. or maybe Lisa can now that she is a lameduck


  6. - City Zen - Thursday, Sep 28, 17 @ 2:35 pm:

    Anyone who has seen an episode of “Parking Wars” shouldn’t be surprised by this.


  7. - OneMan - Thursday, Sep 28, 17 @ 2:40 pm:

    nor be surprised if you watch the ads on afternoon judge shows, one of the firms even mentions tickets specifically.


  8. - Real - Thursday, Sep 28, 17 @ 2:40 pm:

    This is one of the main reasons I am planning on moving out of Chicago. I have no moving traffic tickets, only parking tickets here that are close to $2,000. The city of Chicago is not flexible at all in it’s payment plans. It’s as if the system is set up for you to fail. I have had my car booted twice in the past 2 years over parking tickets. If I was laid off of work or anything the city of Chicago would own my car.

    The city of Chicago is more aggressive than my car finance company. I have had no problems with Chrysler Capital if I pay a few days late. If you pay the city of Chicago a few days late on a payment plan they are ready to boot and tow your car.


  9. - DuPage Saint - Thursday, Sep 28, 17 @ 2:40 pm:

    I think we should go Scandinavian. Speeders and traffic tickets should be based on income. If you want to use red light cameras and tickets as a money maker let the guy driving a Mercedes pay 5% of the value of the car for a ticket. Same for the guy driving a beater. The guy driving the beater probably needs his/her car more.


  10. - Lobo - Thursday, Sep 28, 17 @ 2:52 pm:

    From the study the article was based upon…

    “The bankruptcy statute gives two reasons
    why Chapter 13 is attractive for these consumers: First, traffic and parking tickets and
    other fines can be discharged in Chapter 13, but not in Chapter 7. Second, the Chapter
    13 process triggers an automatic stay that prevents the state or city government from
    suspending the consumer’s driver’s license or seizing or disabling the consumer’s vehicle
    (and the government must return licenses or vehicles that have been seized or disabled).
    In Illinois, a driver’s license can be suspended if the driver has accumulated ten or more
    unpaid parking tickets, or at least unpaid tickets for certain moving violations. The
    median fine is $60.
    Among consumers with tickets or other fines, the average consumer
    has over $4,000 in such debt (the median consumer has over $2,700).”


  11. - Amalia - Thursday, Sep 28, 17 @ 3:15 pm:

    also 46% with Utility debts re the study. that’s pretty big. and concentration of lawyers. and choice of bankruptcy filing. both of which affect outcome. a deeper dive into the details on debts seems necessary. with the rate of filing doubled since 2009, the odds of looking at one cause changes. correlation but not causation perhaps. perhaps more an issue, what do we do? the implications from the one correlation seem kind of ridiculous.


  12. - City Zen - Thursday, Sep 28, 17 @ 3:21 pm:

    Dupage - What if Bruce runs a red light while driving his VW Eurovan?


  13. - Anonymous - Thursday, Sep 28, 17 @ 3:23 pm:

    I am a disabled Irish cop and my Father has lots of clout and I can relate closely to this post. For whatever reasons I have no health insurance and been slammed in the papers and disabled and no income for 2 years and my Dad controls my whole life right now. I am white and relate.


  14. - DuPage - Thursday, Sep 28, 17 @ 3:25 pm:

    Why are so many going for ch 13 instead of ch 7? I see TV commercials saying “eliminate your debts with chapter 7″.


  15. - DuPage Saint - Thursday, Sep 28, 17 @ 3:42 pm:

    Citizen Zen. Vehicle code would be amended. Governors and mayors that violate automatic 30 days in county jail


  16. - pskila - Thursday, Sep 28, 17 @ 3:57 pm:

    no surprises, economic exploitation of the poor and disenfranchised is the norm in the city of Chicago.


  17. - Rocky Rosi - Thursday, Sep 28, 17 @ 4:02 pm:

    Same ol story. It’s sad. The system doesn’t work and this is not fair. Unless you walk in the shoes of the disenfranchised you will never understand. Pray.


  18. - Anonymous - Thursday, Sep 28, 17 @ 4:24 pm:

    The idea that traffic tickets or parking violations of any sort could possibly lead to a process that suspends anyone’s driver’s license is totally based in a Middle Ages feudal view of “law” that is at odds with the Constitution.

    On the bright side, all this revenue helps arm the paramilitary police state with Army surplus Hummers and fully automatic weapons, plus set up multi-jurisdictional task forces. All for your own good, and to “keep us safe” of course.


  19. - Mrs. O'Leary's Pig - Thursday, Sep 28, 17 @ 4:45 pm:

    How about we have free parking in Chicago and everyone pays for their own abortions?


  20. - wordslinger - Thursday, Sep 28, 17 @ 4:53 pm:

    –In our analysis, we note that the rise in Chapter 13 filings has mainly been driven by black, low-income debtors unable to pay tickets owed to the City of Chicago.–

    This is just sick. People filing bankruptcy to protect their houses over parking tickets?

    What the heck, Democratic politicians? Push yourselves away from the trough and fix this.

    Great work by Pro Publica.

    Maybe that new alleged working-class newspaper in Chicago wants to pick up on this despicable attack on citizens over something so stupid.

    You know the other one won’t, what with the arithmetic and neighborhoods involved.


  21. - cdog - Thursday, Sep 28, 17 @ 9:15 pm:

    I feel badly for the people that are struggling with this.

    I have to ask, though, why not follow the parking rules, the speed limits, etc?

    Seems obvious. No tickets, no bankruptcy issues.


  22. - Sands - Thursday, Sep 28, 17 @ 9:44 pm:

    Pot calling kettle, I have been put off by the kneeling in the NFL, but I must say, you are spot on. This is sad, and seemingly easy to remedy. Just no real will to do so.


  23. - proudstatetrooper - Friday, Sep 29, 17 @ 9:07 am:

    Cops aren’t writing the tickets. They could care less about the revenue for the Mayor and Alderpersons. They are not going to waste their time for a parker when it will only end up with a public altercation in the community while being on camera and berated. Do away with all parkers and minor traffic then. See where that gets you. More of the same in the city of Chicago.


  24. - Ron - Friday, Sep 29, 17 @ 9:14 am:

    cdog, yep. Stop speedingm, problem solved


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