Chicago Won’t Return Cars to Bankrupt Owners, Courts Conflicted

Federal courts in Chicago have different ideas on what the city must do with vehicles it impounds for parking violations when owners seek bankruptcy.

The U.S. Bankruptcy Court for the Northern District of Illinois held in two cases on May 25 that Chicago has to return them immediately, or pay $100 damages every day until it does.

Judge Jack B. Schmetterer rejected a contrary district court ruling, noting that a “decision by a single District Judge is non-binding.”

The disputes involve a Chicago municipal code that gives the city a possessory lien on vehicles it impounds. Chicago courts disagree on ...