Many small businesses fall into debt when they are slammed by city fines. This may happen because they violated building codes or failed to report certain information to the local government. Whenever you are facing city fines, you may be able to get them discharged in your bankruptcy. This is no a 100% fool-proof situation, but often is successful. For example, if you are filing for a Chapter 7, the court will look at how the municipal ordinance that declares your fines is worded. Also, the bankruptcy court will look at how the authorities determined the penalty amount.

Ordinarily, fines and penalties owed to a government entity are non-dischargeable in bankruptcy. For example, if you are issued a traffic citation, or if you are given a hefty traffic ticket, these are not dischargeable costs. The laws maintain that the government entity that issued your fine or fee normally doesn't have to file a complaint or objection to prevent a discharge. Instead, the court will automatically reserve funds to pay back all fines and fees that apply.

There is, however, one exception to this lawyer. If the government fine is meant to compensate for an actual pecuniary loss, then it is dischargeable. This means that if the fine was to compensation the costs of responding to a false alarm, then this is dischargeable. For example, if the fine is $300 and it is to compensate the workers who traveled to your shop when a false alarm was set off, you can seek a discharge for this cost.

Also, if a driver knocks over a stop sign and the city asks for repayment specifically to replace the sign, then this can be considered a dischargeable cost. Another example, if you have allowed brush to collect on your property, and the city sends you a bill for the removal of this brush, this may be a dischargeable expense. If you set off fireworks in a city where this is illegal, and consequently set city-owned property on fire, then you may be able to discharge the costs of repairing the property, but not the criminal fines that may be tacked onto the order. Essentially, it all comes down to whether or not the cost was issued as a penalty or as recompense.

County or city fees can also be discharged in part. When you receive a bill or fine, make sure tin investigate the cost of the bill and look at the breakdown. For example, if $500 of a $1,000 bill is for damages, then you may be able to seek a discharge for that $500. You should talk with a local lawyer today if you want more information about this situation! Use this directory to find a reliable bankruptcy attorney that can help you with your personal or business bankruptcy case.