The Bankruptcy Automatic Stays Impact On Collection Of Criminal Justice Debt
A major benefit of bankruptcy is that the filing of a case triggers an automatic stay of actions to collect on pre-bankruptcy debts. 11 U.S.C § 362. However, an exception to the automatic stay applies to the commencement or continuation of a criminal action or proceeding against the debtor. 11 U.S.C. § 362. Collection of criminal justice fees and charges sometimes fall into a gray area under this standard. SeeNCLCs;Clearing the Path to a New Beginning: A Guide to Discharging Criminal Justice;Debt in Bankruptcy,;at 34; NCLCs Collection Actions § 11.5.2; NCLCs Consumer Bankruptcy Law and Practice § 188.8.131.52
If the collection activity involves the enforcement of a specific court order directing fixed payments under a defined schedule, the continuing collection activity is likely excepted from the automatic stay and can proceed despite the bankruptcy. Actions by a private debt collector to collect on debts assessed outside of the sentencing order are more likely to be barred by the stay.
What Debts Can Be Discharged Under Bankruptcy
Bankruptcy can be a very powerful tool when it comes to gaining financial independence. The biggest benefit of bankruptcy is the discharge given to the debtor when a bankruptcy case is complete. However, not all debt is eligible to be discharged by bankruptcy. Below youll find a guide that explains which debts can and cannot be discharged by bankruptcy.
How To Clear Court Fines In Bankruptcy
Most of us are familiar with fines resulting from traffic tickets. But other fines exist too, such as victim restitution or building code violation assessments. Many fines don’t go away in bankruptcyespecially court fines. Here’s how you figure out whether yours will qualify for a discharge.
Your first step will be to determine whether you owe the fine to a governmental entity. It could be from one of many federal, state or city government organizations, or an entity acting on behalf of the government, such as a tollway authority.
Next, you’ll figure out what the issuing agency hoped to achieve by assessing the fine.
- Punishment fines. Fines intended to punish you for some action aren’t dischargeable in Chapter 7 bankruptcy. For instance, traffic tickets and restitution payments are a penalty for violating the law and wouldn’t be discharged. By contrast, fines and penalties owed to a government agency are dischargeable in Chapter 13 bankruptcyeven if the debt was due to fraud. However, there’s an exception: You can’t discharge fines or restitution included in a criminal sentencing in any type of bankruptcy case.
- Reimbursement fines. Fines that seek reimbursement for expenses are dischargeable. Let’s say the city sends you a notice stating that your overgrown lawn is in violation of city code but you ignore it. The city has it mowed for you and sends you the bill . The fine is the city’s way of recouping the mowing expense and the debt should be dischargeable.
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Describing The Impact Of The Crime
After a defendant is convicted, victims; may also be asked to complete a Victim Impact Statement. This statement allows victims the opportunity to report on various consequences of the offense, including financial, social, psychological and/or medical consequences. The Victim Impact Statement provides an important way for the Judge to consider losses and harm as a result of the crime.; The Victim Impact Statement is provided by the Victim Witness Unit in the U.S. Attorneys Office. However, the probation officer may also request this information from you.
Can Criminal Restitution Be Discharged In A Bankruptcy
Criminal restitution ordered to be paid to victim of a crime, or a qualified third party , is common in criminal courts.; From misdemeanors to the most serious felonies, restitution is often ordered to compensate the party who suffered a financial loss as a result of the criminal behavior. Restitution can be ordered as a condition of probation, but it can also be imposed as a lien on the Defendant. The amount of restitution ordered can vary greatly.; For example, consider a situation where a driver loses control of his vehicle, and runs over a neighbors mailbox.; Ignoring the fact that car insurance would most likely cover the damage, a judge could order the driver to pay the neighbor for the value of the mailbox.; This might be $30 or so.; Now consider the Bernie Madoff Ponzi scheme scandal.; As a result of his crimes, Madoff was ordered to pay $170 Billion in restitution.
So when the idea of owing money comes up, people often think of Bankruptcy as a potential solution.; Many times, bankruptcy can be a great ticket out of financial ruin.; The question then becomes: can criminal restitution be wiped out through bankruptcy? The short answer is no, however bankruptcy can make paying the restitution much easier.
How to Get Some Relief
Contact the experienced Florida Bankruptcy Lawyers at Berkowitz & Myer for a no cost consultation regarding your bankruptcy options. ;We look forward to helping you.
Debts Never Discharged In Bankruptcy
While the goal of both Chapter 7 and Chapter 13 bankruptcy is to put your debts behind you so that you can move on with your life, not all debts are eligible for discharge.
The U.S. Bankruptcy Code lists 19 different categories of debts that cannot be discharged in Chapter 7, Chapter 13, or Chapter 12 . While the specifics vary somewhat among the different chapters, the most common examples of non-dischargeable debts are:
- Alimony and child support.
- Certain unpaid taxes, such as tax liens. However, some federal, state, and local taxes may be eligible for discharge if they date back several years.
- Debts for willful and malicious injury to another person or property. âWillful and maliciousâ here means deliberate and without just cause. In Chapter 13 bankruptcy, this applies only to injury to people; debts for property damage may be discharged.
- Debts for death or personal injury caused by the debtorâs operation of a motor vehicle while intoxicated from alcohol or impaired by other substances.
- Debts that you failed to list in your bankruptcy filing.
Can You File For Bankruptcy To Avoid Paying Restitution In Pennsylvania
Restitution is a court ordered payment to a victim of a crime. Whether you were convicted of a felony or misdemeanor, restitution is often ordered to compensate the party who was harmed or suffered a financial loss due to your criminal behavior. In some cases, restitution could be ordered as a probation condition. The amount will vary on the degree of damages. For example, if you crashed into another persons car, you could be ordered to pay for the cost of repairs. However, if you masterminded a fraudulent financial pyramid scheme, you could be ordered to pay hundreds of thousands of dollars to your victims.
Because many people view restitution as a debt, they wonder if they could eliminate it by filing for bankruptcy. Unfortunately, restitution is categorized as non-dischargeable debt under the Bankruptcy Code. This means that you cannot avoid your restitution obligations by filing for bankruptcy in Pennsylvania.
However, bankruptcy could still provide you some relief. If you have been ordered to pay restitution, our Philadelphia bankruptcy attorneys could have options to relieve your burden. While it is impossible to eliminate your restitution, bankruptcy could make it more manageable. To see if bankruptcy could be helpful, call Young, Marr & Associates at 701-6519.
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Does Bankruptcy Eliminate All Of My Debts
You might be wondering which of your debts can be included in a bankruptcy, eliminating your responsibility to try and repay them. The simplest answer is that a bankruptcy eliminates most, if not all, of what are known as unsecured debts. These include any credit cards, lines of credit, personal loans, payday loans and income tax debt. When you file for bankruptcy, you will no longer have to worry about repaying these debts.
On the other hand, there are certain types of debt that cannot be eliminated by filing for bankruptcy. Even after you complete the bankruptcy process, you will still be responsible for repaying the following debts:
Secured debts, such as a mortgage or car loan. Because these forms of debt are guaranteed by an asset , you need to continue to make payments; otherwise, your creditors can repossess your vehicle or your property.
Child;support or alimony. These payments must continue even if you file for bankruptcy. If youre behind on your payments, your former spouse or partner will be considered a preferred creditor in your bankruptcy claim.
Student loans, if youve been out of school for less than seven years. If its been more than seven years since you were a full-time or part-time student, then student loan debt can be included in bankruptcy.
Any court fines, penalties, bail bonds or restitution imposed from a criminal or civil trial.
Chapter 7 Vs Chapter 13
Chapter 7 and Chapter 13 are the two most common types of personal bankruptcy.
In a Chapter 7 bankruptcy, a trustee appointed by the bankruptcy court will liquidate many of your assets and use the proceeds to pay your creditors some portion of what you owe them. Certain assets are exempt from liquidation. Those typically include part of the equity in your home and automobile, clothing, any tools you need for your work, pensions, and Social Security benefits.
Your nonexempt assets that can be sold off by the trustee include property , a second car or truck, recreational vehicles, boats, collections or other valuable items, and bank and investment accounts.
In Chapter 7, your debts are typically discharged about four months after you file your bankruptcy petition, according to the Administrative Office of the U.S. Courts.
In a Chapter 13 bankruptcy, by contrast, you commit to repaying an agreed-upon portion of your debts over a period of three to five years. As long as you meet the terms of the agreement, you are allowed to keep your otherwise-nonexempt assets. At the end of the period, your remaining debts are discharged.
In general, people with fewer financial resources choose Chapter 7. In fact, to be eligible for Chapter 7, you must submit to a means test, proving that you would be unable to repay your debts. Otherwise, the court may determine that Chapter 13 is your only option.
Can Restitution Be Included In Bankruptcy
Can Restitution Be Included In Bankruptcy. Identified victims whose losses are included in the counts of conviction or as part of a plea agreement will also have the opportunity to request restitution and. See hanoch dagan, restitution in bankruptcy:
Filing bankruptcy under any chapter of the united states bankruptcy code will immediately get creditors off your back. It was an injunction that prohibited your creditors from taking any action to collect your debts while you were in bankruptcy. Accounts included in bankruptcy remain on the report for seven years from the original delinquency date. Yes, bankruptcy covers most types of payments with the exception of federal taxes and student loans. Bankruptcy is a democratized system that offers debt discharge for all debtors who are unable to pay their debts, even those who have become entangled in the but what happens if a debtor has criminal restitution payments that he/she wants to discharge?
Talk To Our Pennsylvania Bankruptcy Attorneys If You Have Court Ordered Restitution
If you believe your restitution payments will make it difficult to pay your monthly expenses, you have options. While avoiding paying restitution is not one of the available options, you could find relief by filing for bankruptcy. Our Montgomery County bankruptcy lawyers are committed to assisting those struggling with financial obligations. Just because you cannot discharge restitution does not mean bankruptcy is not beneficial. Call 701-6519 to talk with one of the experienced attorneys at Young, Marr & Associates.
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Find Out How Filing For Bankruptcy Can Help With Court Fines
Financial difficulties resulting from a criminal matter are one of the many reasons that people file for bankruptcy. Clearing criminal court finesor any fines owed a government agencycan be a great way to solve the problem, but it isn’t always possible. Whether you can discharge a fine in bankruptcy will depend on why you were assessed the fine to begin with.
Even if you can’t clear the fine, filing for bankruptcy might help in other ways. Getting rid of qualifying debt in Chapter 7 bankruptcy will free up more money to pay your obligation. Or, you can get additional time to pay by filing for Chapter 13 bankruptcy.
Can I Discharge My Traffic Ticket In Bankruptcy
One of the chief purposes of bankruptcy is to discharge debts that you cant afford to pay which can provide you with a fresh financial start. Because it is not always in the best interest of the general population to allow the discharge of certain debts, Congress has made some debts non-dischargeable, like child support obligations, most student loans, and some tax debts. Included in this list are criminal fines and court-ordered restitution. Bankruptcy will simply not allow you to escape criminal liability.
Section 523 of the bankruptcy code states:
a discharge under section 727, 1141, 1228, or 1328 of this title does not discharge an individual from any debt to the extent such debt is for a fine, penalty, or forfeiture payable to and for the benefit of a governmental unit, and is not compensation for actual pecuniary loss, other than a tax penalty.
In a Chapter 7 case, government fines are not dischargeable, including fines for criminal wrongdoing. However, a Chapter 13 debtor who completes all plan payments may be able to discharge certain non-criminal government fines. Section 1328 of the bankruptcy code states that a Chapter 13 debtor who completes all payments under the Plan receives a discharge of all debts provided for by the plan or disallowed under section 502 of this title, except any debt for restitution, or a criminal fine, included in a sentence on the debtors conviction of a crime. .
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Bankruptcy Chapter 7 Bankruptcy Bankruptcy Petition Bankruptcy Court Automatic Stays In Bankruptcy Bankruptcy Documents Chapter 13 Bankruptcy The Purpose Of Criminal Restitution Is The Compensation Of Victims For Financial Loss
This amount should not be included on the plan. May discharge some taxes, civil penalties. Early comment in the r3rue observes that the concern of restitution is not with unjust enrichment in the broad, moral sense but with the narrower set of circumstances giving rise to. These include fines for traffic violations, parking tickets, building code violations, and toll charges. Identified victims whose losses are included in the counts of conviction or as part of a plea agreement will also have the opportunity to request restitution and.
Can A Court Ordered Restitution Be Discharged When Filing Bankruptcy
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Filing A Chapter 13 Bankruptcy May Help
So what happens if you are financially responsible for the debts caused by a DUI or your willful or malicious injury to another person or their property and you do not have the funds readily available on hand to repay the debt? ;Although the debts are not dischargeable in a Chapter 7 bankruptcy you can file a Chapter 13 Bankruptcy to repay the debts over a period or three to five years. ;If the debts cannot be repaid within the five years due to your financial circumstances you may always file another Chapter 13 bankruptcy to pay the remaining balance.
If you owe any debt related to an accident it is best to seek the advice of an experienced bankruptcy attorney that will help you either discharge the debts in a Chapter 7 or repay the debts in a Chapter 13 and ultimately help you move on with your life.
At Bond & Botes, our affiliated offices offer;free initial consultations.; Please feel free to call one of our;conveniently located offices;to set up a private consultation with one of our;experienced attorneys.; We will analyze your situation and help you to make the best decision possible to help you eliminate that debt once and for all.
Bankruptcy As An Option After An Accident
If you are financially responsible for a car accident you need to take a look into all the options that are available for you. ;One of the options is that you may be able to file for bankruptcy to discharge those debts depending on your circumstances. ;Normally your debts related to a car accident are dischargeable. ;This is true whether the debts are related to personal injury or property damage. ;You would simply list the debt in a chapter 7 bankruptcy and the debt would be discharged.
There are two exceptions where the debts arising from a car accident are not dischargeable in bankruptcy.
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