Can Tolls Be Included in Bankruptcies?

Bankruptcy offers a legal path for individuals to find relief from overwhelming debt. This federal process allows for the elimination of certain debts or the creation of a structured repayment plan, providing a financial fresh start. This article examines how toll debts are handled within the bankruptcy framework, exploring their components and implications for discharge.

Understanding Toll Debt Components

An unpaid toll can quickly accumulate into a larger debt, comprising several distinct financial components. Each component carries different implications, particularly when considering debt relief options.

The base toll amount represents the actual cost of using a toll road or bridge. Late fees or administrative fees are often added when a toll is not paid by its due date. These fees cover the processing and collection expenses incurred by the toll authority.

Civil penalties are another layer of charges, imposed as fines for non-payment or violations. These penalties are not criminal in nature but are assessed by a governmental unit. Criminal fines or sanctions are the most severe type of penalty, arising from a court judgment for criminal offenses related to toll evasion, such as repeated intentional non-payment leading to misdemeanor charges. These are distinct from civil penalties as they result from a criminal proceeding.

Dischargeability of Toll Debts

The ability to eliminate toll debts through bankruptcy depends significantly on the specific component of the debt. Not all financial obligations associated with tolls are treated equally under bankruptcy law. The nature of the debt determines whether it can be discharged, meaning the debtor is no longer legally obligated to pay it.

Base tolls and associated administrative or late fees are generally considered unsecured debts. These are similar to credit card debts or medical bills and are typically dischargeable in both Chapter 7 and Chapter 13 bankruptcy proceedings. This means the original toll amount and the fees for delayed payment can be eliminated.

The dischargeability of civil penalties, however, can vary. Some civil penalties might be dischargeable, particularly if they are viewed as compensatory rather than punitive. However, civil penalties that are categorized as “fines, penalties, or forfeitures payable to a governmental unit” and are not compensation for actual monetary loss are generally non-dischargeable in a Chapter 7 bankruptcy. Chapter 13 bankruptcy, in contrast, offers a broader “super discharge,” which may allow for the discharge of some governmental penalties that are not dischargeable in Chapter 7, even if they arise from fraud.

Criminal fines and sanctions, which result from a criminal sentence for offenses like criminal toll evasion, are almost universally non-dischargeable in bankruptcy. Federal law specifies that such debts, imposed as part of a criminal judgment, cannot be eliminated through bankruptcy. This distinction underscores the legal system’s intent to ensure accountability for criminal conduct, even when an individual seeks bankruptcy protection.

Listing Toll Debts in Bankruptcy

Including toll-related debts in a bankruptcy filing requires careful attention to detail. The process involves accurately scheduling all known obligations to ensure proper notification to creditors and potential discharge. This procedural step is fundamental to a successful bankruptcy case.

Debtors must accurately list all creditors, including toll authorities or agencies, on their bankruptcy schedules. These are typically filed on forms like Schedule E/F, which is designated for unsecured claims, distinguishing between priority and nonpriority debts. Providing complete and accurate information for each listing is important, including the name of the toll authority, their address, and the account or violation number.

The approximate amount owed for each component of the toll debt should also be included on the schedules. For instance, if a debt includes a base toll, administrative fees, and civil penalties, each part should be accounted for. Failure to list a known debt can prevent its discharge, meaning the debtor would still be responsible for that obligation after the bankruptcy case concludes. The bankruptcy court clerk’s office notifies listed creditors of the filing, and creditors not listed may not receive proper notice, potentially impacting the dischargeability of their claims. For any debts that are non-dischargeable, such as criminal fines, the obligation to pay will remain even after the bankruptcy discharge is granted.