Are fines associated with criminal convictions dischargeable in a bankruptcy?

Non-dischargeable debts

Although the purpose of a Chapter 7 bankruptcy is to provide the debtor a fresh start by discharging your unsecured financial obligations, there are some debts that are non-dischargeable under the bankruptcy statue. Those debts include, domestic support obligations, most student loans, some tax debts and criminal fines and court ordered restitution.

Section 523(a)(7) of the bankruptcy code states in pertinent part:

“a discharge under section 727, 1141, 1228(a), or 1328(b) 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.”

The public policy reasoning behind the non-dischargeability of fines associated with criminal offenses is to ensure that someone who is guilty of a criminal offense is required to pay to the full extent of their culpability.

Is there anyway to include fines associated with criminal offenses in a 13?

Even if a criminal fine is not dischargeable during bankruptcy, it can be included in the Chapter 13 plan. Just as is the case in for any other creditor during the pendency of a 13, The creditor (often the state government) is not allowed to collect from the debtor during the bankruptcy. In some cases this can prevent the debtor from having a license revoked or spending time in jail for non-payment of the fine. However, at the end of the case a non-dischargeable debt survives and the state can collect from you.

If you need to file bankruptcy and have outstanding government fines, call Dailey Law Offices today to speak with an experienced attorney on your bankruptcy options.


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