The city of Chicago said Friday that it will wipe out some, if not all, debt due to unpaid vehicle sticker tickets for motorists who come into compliance by the end of October, a program that has the potential to benefit an estimated 500,000 motorists and lead to hundreds of millions of dollars in debt forgiveness.

The announcement comes as the office of City Clerk Anna Valencia prepares to offer its own amnesty program next month allowing residents to buy prorated vehicle stickers without incurring late penalties.

The two-pronged approach from two offices of City Hall amounts to what officials term a “fresh start” for struggling Chicagoans, as the city purges old debts and makes stickers more affordable.

The use of city stickers is Chicago’s way of charging vehicle owners for using city roads. Stickers typically cost between between $88 and $139 per year, depending on vehicle weight.

Failure to buy a sticker can lead to some of the costliest citations in the city. Debt from those tickets, in turn, has contributed to tens of thousands of vehicle impoundments, license suspensions and Chapter 13 bankruptcies, ProPublica Illinois and WBEZ Chicago have reported.

• RELATED STORY

Task Force Will Take on Ticket and Debt Collection Reform

read more

At $200, city sticker tickets could rise to $488 with late penalties and collection fees, though last week the City Council voted to slash the late penalties. Aldermen also reinstated a 15-day grace period for lapsed stickers and banned consecutive and same-day ticketing.

Unpaid city sticker tickets are the largest source of outstanding ticket debt and represent one in four parking tickets tied to Chapter 13 bankruptcies. Motorists owe the city more than $500 million in unpaid city sticker tickets issued since 1990.

Chicago’s majority-black neighborhoods have been hit the hardest with sticker ticket debt, in part because they are ticketed at a higher rate, per household, than other parts of the city, according to the ProPublica Illinois-WBEZ Chicago analysis of sticker tickets from 2011 to 2015. Tickets issued by police drive the disparity.

“City sticker amnesty and debt relief are just the first steps toward building a more equitable Chicago,” Mayor Lori Lightfoot said in a video announcement Friday. “It’s a new day in Chicago and we’re going to make sure every single person gets a fair shot at economic opportunity.”

The city launched a website with more information about the amnesty program. Here are some key points about how the programs are supposed to work.

More affordable vehicle stickers: Starting next month, Valencia’s office will allow motorists to buy four-month city stickers at a prorated cost, a program designed to help low-income motorists comply with the municipal requirement and avoid tickets. What’s more, the clerk’s office in October won’t charge late penalties or backdate stickers for motorists who had allowed their vehicle stickers to lapse.

“As government we should be removing barriers from people’s lives, not put barriers in their lives,” Valencia said. “We want to make sure that we are helping people get out of debt, and stay out of debt, and prevent it from ever happening again.”

Debt relief for vehicle sticker debt: Between Nov. 15 and Dec. 15, motorists who have valid city stickers can apply to have at least three city sticker tickets forgiven. Those who are in financial hardship can qualify to have all of their city stickers forgiven. As part of the reforms passed last week, the City Council also expanded the hardship qualifications so motorists whose households earn 300% of the poverty level or less qualify.

Indebted motorists can sign up to be notified when the debt forgiveness program opens. The city is not offering refunds for motorists who have already paid their tickets.

The city is offering the debt forgiveness to motorists who have valid city stickers as of Oct. 31.

Motorists in bankruptcy or on city payment plans also qualify.

Indebted motorists who no longer own their vehicles or have left Chicago entirely and no longer need a city sticker will also qualify for the debt relief, city officials said. This year, WBEZ Chicago reported that tens of thousands of drivers whose cars were booted, towed and sold were still responsible for their ticket debt.

Elliott Ramos is WBEZ’s data editor. You can follow him on Twitter at @ChicagoEl. Melissa Sanchez is a reporter at ProPublica Illinois. You can follow her on Twitter @msanchezMIA.