Justices Say Ch. 13 Doesn't Force Return Of Seized Property

Law360 (January 14, 2021, 10:33 AM EST) -- The U.S. Supreme Court reversed a series of lower court rulings Thursday in finding that the City of Chicago did not violate the automatic stay included in the bankruptcy code when it refused to return impounded vehicles owned by four Chapter 13 debtors.

The decision, written by Justice Samuel Alito, said the city was already in passive control of the vehicles, which were impounded because the debtors did not pay vehicle fines, and the code does not require a possessor of estate property to take affirmative actions to return property.

"The mere retention of estate property after the filing of a...

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