Bankruptcy and Traffic Tickets and Fines

One of the main purposes of filing for personal bankruptcy in Canada is to discharge your debts. To discharge your debts means to get rid of them, so that you are not required to pay those debts.

However, there are certain types of debts that are not dischargeable in a bankruptcy. If you go bankrupt, you are still liable for those debts. Here is a quote from section 178(1) of the Bankruptcy & Insolvency Act of Canada:

178. (1) An order of discharge does not release the bankrupt from

(a) any fine, penalty, restitution order or other order similar in nature to a fine, penalty or restitution order, imposed by a court in respect of an offence, or any debt arising out of a recognizance or bail;

In other words, going bankrupt does not release you from any “fine… imposed by a court in respect of an offence…”

That means that traffic tickets and fines do not go away if you go bankrupt.

How to deal with traffic tickets and fines

If you are in financial trouble, and you have outstanding traffic tickets and fines, you have a number of options.

Since you know that by going bankrupt you cannot discharge these debts, the most logical option is to pay them. If you don’t pay your traffic tickets it is likely that at some point your driver’s license will be suspended, or you will not be able to renew your license plates. If you have a $100 outstanding fine, it is better to pay the $100 owing and discharge the debt.

If you have made the decision to go bankrupt, you will probably stop paying your other debts, such as credit cards, while your bankruptcy paperwork is being prepared, so you could use the money you are saving to pay your traffic fines.

If you cannot pay them in full immediately, talk to the court or the City and work out repayment arrangements. You may be able to make weekly or monthly payments towards your fines. It is possible that if they are receiving regular payments, they will not suspend your license.

A final option is to get the advice of an expert in this area. In some cases, if you are not an expert in traffic law, it can be risky to attempt to deal with traffic fines on your own. So, if you can’t deal with this on your own, getting help now is a wise choice.

Once you have dealt with your traffic fines, it may then be necessary to consult with debt expert to deal with your other debts.

Join the Conversation

  1. AvatarShawn D.

    I am a auto mechanic and my licence has been suspended, I got injured about 5 years ago by having a car fall off the hoist and pretty much destroying my shoulder (i know I was lucky). Because of this I was put on very powerful opiate pain killers, and after2-3 years of being on these I was addicted very badly. Anyways I not only didn’t care about the pain, stopped caring about everything in between life and let my life fall apart. 2years ago I decided too get off them and I’ve been 100% clean since January 1st 2014, now I have outstanding fines of almost $10 000 and a suspended license. I need help please, anybody with some advice… I am so ready to go back to work and no one will hire a auto mechanic without a driver’s license. I’m begging anybody for help.

  2. AvatarJ. Douglas Hoyes

    Hi Shawn. Filing bankruptcy does not discharge court fines.

    In your situation, I would suggest talking to a lawyer, or a paralegal who can help you in traffic court. One possible option would be to go to court, explain your situation, and ask the judge to reduce your fine, or perhaps re-instate your license so that you can get a job, on the understanding that you will begin to make payments towards the fine. In your case only the court can deal with the fines, so a bankruptcy would not help you get your license back.

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