Chicago Court orders City to surrender vehicle to Debtor notwithstanding asserted possessory lien to secure traffic tickets

In a recent case, Judge Schmetterer held in In re Cross, Adversary No. 18 AP 00154, that the City of Chicago did not have the right to retain a chapter 13 debtor's vehicle to protect its possessory lien on the car that allegedly secured payment of 30 traffic tickets.  According to the Court:

The Seventh Circuit opinion in Thompson v. Gen. Motors Acceptance Corp., LLC, 566 F.3d 699 (7th Cir. 2009) placed the burden squarely upon creditors to initiate a showing as to why they should be allowed to retain vehicles of bankruptcy debtors that were seized prepetition.
Unless such showing is initiated, creditors must tender the vehicle because of the automatic stay. The City of Chicago has completely disregarded this obligation, choosing instead to continue holding vehicles of debtors post-petition and waiting many months until proceedings are brought by debtor against it in bankruptcy and then assert a response that its purported possessory lien grants it an exception to the automatic stay. The City has taken this tactical delay position to coerce debtors to pay traffic fines quickly and fully in their bankruptcy plan and also to avoid paying filing fees required for the filing of motions for relief from the automatic stay. In this way, the City is circumventing entirely the procedural burden imposed on it by Thompson and the protections provided to debtors by the automatic stay. The City must comply with the requirements of Thompson so that debtors may, unless some cause is shown, recover their vehicles in bankruptcy, allowing them to continue working and making payments under their Chapter 13 plans.

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