Wiping Out Government Fines and Tickets in Bankruptcy

Here’s the short answer: You can discharge a government fine, penalty, or ticket in bankruptcy if the government imposed it to make itself whole for a financial loss. You can’t discharge it if the government imposed it to punish you. And if you’re weighing your options, Chapter 13 wipes out more of these debts than Chapter 7 does.

What Counts as a Government Fine, Penalty, or Ticket?

Plenty of names apply here, such as fine, penalty, forfeiture, ticket, toll, or surcharge. The law might tag the debt as criminal, civil, or administrative, but that label doesn’t control whether you can discharge it. What matters is that you owe the debt to a governmental unit—a city, state, federal agency, or something like a tollway authority—and why the government imposed it.

Does the Fine Punish You or Compensate the Government?

It comes down to purpose. If a fine is penal, meaning meant to punish you for wrongdoing, you’re stuck with it in a Chapter 7 case. If it’s designed to compensate the government for a pecuniary (monetary) loss instead, you can wipe it out. (11 U.S.C. § 523(a)(7).)

Example. Say you spray paint graffiti in a public park and get caught. You’ll likely face two fines: one for defacing public property, and one to cover cleanup. The first is probably a nondischargeable debt. It’s there to punish you for breaking the law. The second is probably dischargeable, since it’s just the city trying to recoup its paint-removal costs.

How State or Local Law Classifies the Fine

Whether a fine counts as penal often hinges on how your state or city treats the underlying infraction. Misdemeanors and felonies are almost always criminal, so those fines aren’t going anywhere in bankruptcy. Parking and routine traffic tickets are murkier: some states and cities don’t classify them as criminal, which gives filers an argument for discharge, but many courts still treat them as nondischargeable penal fines. Because the outcome depends heavily on your jurisdiction, don’t assume a ticket will disappear in Chapter 7 without checking local case law first.

Which Fines and Penalties Can You Discharge in Bankruptcy?

Some fines fall clearly on one side of the line; others are a genuine gray area, and even attorneys disagree depending on the jurisdiction.

• Bad check fees. These usually stem from criminal or civil fraud, so expect them to be nondischargeable.
• Unpaid road and bridge tolls. Opinions differ here. The argument for discharge: a toll is just payment for using the road, not a punishment. Courts are split, so treat this as disputed rather than settled.
• Criminal restitution. Nondischargeable, full stop. “Restitution” sounds like compensation, but the U.S. Supreme Court settled this one—it’s penal. (Kelly v. Robinson, 479 U.S. 36 (1986).)
• Income tax penalties. Bankruptcy law carves these out for special treatment. If the underlying tax is less than three years old, both the tax and the penalty are nondischargeable. Once the tax passes the three-year mark, the penalty might become dischargeable, but the underlying tax debt itself must independently meet several other tests (the return was filed at least two years before you file, the tax was assessed more than 240 days before you file, and there’s no fraud or willful evasion).
• Fines for building code violations. Treated as criminal in nature, so nondischargeable in Chapter 7.
• Fines for contempt of court. Generally nondischargeable, though some argue a civil contempt fine, which is one issued simply for ignoring a court order, should be dischargeable.
• Bail bond forfeitures. Usually dischargeable.

Fines in Chapter 7 v. Chapter 13

Chapter 13 discharges more fines than Chapter 7 can touch, including many traffic and parking tickets and building code fines once you complete your plan. The table below breaks down how common fines fare under each chapter.

Still, some fines survive Chapter 13 no matter what. Specifically, anything baked into a criminal sentence will survive. You couldn’t discharge a fine that’s part of a conviction for, say, a drug offense or robbing a convenience store. (11 U.S.C. § 1328(a)(3).)

Will Filing for Bankruptcy Get My Driver’s License Back?

Possibly, if you file Chapter 13, even though the fine itself stays on the books. Many states will reinstate a suspended license once you show you’re repaying the debt through an approved plan. Chapter 7 doesn’t come with a repayment plan, so it’s less likely to get your license back on its own.

Talk to a Bankruptcy Attorney Before You Count on a Discharge

Since dischargeability often turns on how your state or city classifies a specific fine, don’t assume yours will disappear without checking first. A local bankruptcy attorney can tell you whether your fine, ticket, or penalty qualifies, and whether Chapter 7 or Chapter 13 gives you the better shot at wiping it out.