There are numerous types of debts owed to a governmental unit that are not dischargeable (eliminated) through any bankruptcy filing. However, there are also various types of debt that appear to be owed to a governmental unit that may be dischargeable, such as an over payment of unemployment benefits, EZ Pass fines and NJ. auto surcharges.

Typically, State and/or municipal traffic fines are not dischargeable (eliminated) in bankruptcy. Therefore, in a Chapter 7, a discharge will not eliminate the debtor’s obligation to pay said fines. In a chapter 13, the fines may be paid, but not discharged.

Chapter 7

No monthly payments are required in a chapter 7 case and the entire bankruptcy proceedings is a about 4 months, after the filing. If the 4 months, certain debt is either discharged or not discharged. Any non-discharged debt is still owed to the creditor after the bankruptcy is completed.

 

Chapter 13

Under all circumstances, the fine must be paid and is not dischargeable.

The New Jersey municipality that levies the fine decides whether the debtor may pay the fine through the bankruptcy plan. If the Municipality consents, the debtor may pay the fine through the monthly chapter 13 bankruptcy plan. If the municipality does not consent, the debtor must pay the fine directly to the municipality pursuant to their terms.

A bankruptcy filing will not eliminate or modify any non-monetary sanctions issued by the State of New Jersey and/or town or municipality, with one exception. In other words, if the State of New Jersey, municipality, county or town orders a license suspended for a certain time period, the bankruptcy court does not have the ability to modify such an order.

NJ Bankruptcy Lawyers

For more information about traffic violations or fines as they relate to your bankrupty case, contact the experienced New Jersey bankruptcy attorneys at the Law Offices of Robert Manchel. We are available via our online contact form or call us at 866.503.5655 for a free consultation.