Plaintiff alleges that the City of Chicago ignored the automatic stay protection under the Bankruptcy Code. The City impounded Mr. Fulton’s car because he had unpaid fines and fees, and informed him that the vehicle would only be returned when the court debt was paid. Mr. Fulton declared bankruptcy, and the automatic stay provision required that vehicles be returned to debtors who file for bankruptcy. The City argued that impoundment as a deterrence helped to enforce traffic regulations. Debtors argued that the City was more concerned with revenue collection than public safety.
Held
None of the exceptions to the stay applied. The City violated the automatic stay and was ordered to return the relevant impounded vehicles.
You can find relevant court documents here.