In the Bay Area, with all the bridges and corresponding tolls, it is not uncommon for people to amass unpaid Fastrak fines. Usually, the FasTrak account was opened and set to auto-recharge from a credit card. The trouble arises when the credit card is declined. If you whiz through the Fastrak lane without sufficient funds in your FasTrak account, the owner of the vehicle will be fined. I have seen people use the Fastrak lane without a valid transponder for months or years amassing thousands of dollars in tolls and fines. Technically the charges are owed to the Metropolitan Transportation Commission but collection is managed by the Bay Area Toll Authority. In turn, the Bay Area Toll Authority can refer the unpaid fines to the Franchise Tax Board as well as the Department of Motor Vehicles. The Franchise Tax Board can intercept tax refunds, levy bank accounts or both to collect the money. More daunting, a person’s driver’s license can be suspended if the charges remain unpaid. All this creates a confusing maze of governmental agencies to deal with.
Bankruptcy forgives many debts but, at times, the law is unclear about forgiveness of some types of debt. For instance, the bankruptcy laws forgive governmental claims for reimbursement of actual expenses incurred by the government but have an exception for governmental fines, penalties and some tax debts. Said another way, if the charge (regardless of whether it is called a ticket, fine or something else) is intended to punish the wrongdoer it will not be forgiven. If, however, the purpose is to reimburse the government for an expense the charge will be forgiven. Most courts do not forgive a debt if the governmental claim has a dual purpose of reimbursing an out-of-pocket expense and punishing the wrongdoer. Parking tickets owed to local government are a common example. Some courts, including a court in San Francisco, interpret bankruptcy law to forgive parking tickets and related late charges when a bankruptcy is filed. If the debt is forgiven there is no basis to withhold a driver’s license or vehicle registration. Other courts may consider a parking ticket quasi-criminal and allow any charges to survive a bankruptcy.
FasTrak is a collection method for bridge (or express lane) tolls. The question becomes what is the purpose of a Bay Area bridge toll and a related fine for failure to pay the toll? According to the California Department of Transportation the bulk of Bay Bridge toll revenues are turned over to the Metropolitan Transportation Commission and then redistributed to BART, MUNI and Alameda County Transit. Accordingly, it seems tolls are used to reimburse actual government expenses and therefore would be dischargeable in bankruptcy. The fine for failure to pay a toll, which is defined as all charges beyond the actual toll(s), appears to be for the purpose of punishing the wrongdoer and reimbursing the government for the costs of collection. This dual purpose could make that portion of the claim non-dischargeable in bankruptcy. Looking at it this way results in the actual tolls being forgiven in bankruptcy but the fines surviving.
As of this writing (January 2017) I have seen FasTrak tolls and fines being entirely forgiven in bankruptcy. Perhaps it is because dividing the claim is complicated and the various governmental agencies want to avoid problems in court? Perhaps it is because the courts have not developed clear rules regarding FasTrak fines in bankruptcy. Today, my advice is to list Fastrak, the Metropolitan Transportation Commission and the Bay Area Toll Authority in any bankruptcy involving Fastrak charges and expect the claim to be forgiven. Once forgiven any hold on a driver’s license or vehicle registration will be lifted and the claim erased for all purposes. This is an evolving area of law and is subject to change.
At the Law Office of Michael Primus we have helped thousands of clients get out of debt, stop wage garnishments, and start fresh through bankruptcy. If you live in Contra Costa, Alameda or Solano counties and have debt problems, contact us for a free in-office consultation. We have offices in Walnut Creek, Antioch, and Hercules.
References: 11 U.S.C. 523(a)(7), 11 U.S.C. 525(a), California Vehicle Code section 40250 et. seq, Bankruptcy of Thomas, 2007 Bank LEXIS 1320 (Bankr N.D. CA 2007).