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Criminal Justice Debt: Consumer Debt Advice from NCLC

This is the seventh in a series of articles from NCLC that provide advice for families in financial difficulty. Other articles address debt collection harassment, medical debt, reverse mortgages, car repossessions, wage and bank account garnishment, and debts owed to the IRS. Click here for a list linking to all the articles in this series. An important and increasingly widespread category of consumer debt is fines, fees, surcharges, and other costs assessed by courts, state agencies, or even private parties as a result of a consumer’s law violation—everything from a traffic ticket to a fee for using a government-appointed lawyer to the premium on a commercial bail bond. Nonpayment of these criminal justice debts can have serious consequences, and you should never ignore them, but instead understand your rights and deal with these debts in a careful and reasoned manner. This article helps you identify your criminal justice debts, explains why such debts require immediate and careful attention, and then provides advice on dealing with these debts. The article explains your defenses to incarceration for nonpayment, provides advice on how to keep your driver’s license when it was suspended for nonpayment of criminal justice debt, and describes your ability to obtain a payment plan or otherwise reduce or delay payment. Finally the article sets out your rights in responding to a collection action on criminal justice debt—that a debt is too old, that state law protects your income or assets from seizure, and what a bankruptcy filing can and cannot do to deal with criminal justice debt. More than for most other debts, the advice of an attorney is recommended and this article has tips on finding an attorney.

Identifying the Type of Criminal Justice Debt You Have

When you are being dunned for a debt, it is important to determine if it is criminal justice debt, and if so, the type of debt and to whom the debt is owed. This will often determine how you respond to that debt. If you think it might possibly be criminal justice debt, contact your lawyer in the criminal proceeding to ask them to send information about how much you owe, to whom, for what, and what your options for payment are. If you don’t have a lawyer, ask the court clerk or the company or government office that is demanding payment.

Types of Government and Court Debt:

  • Fines: Monetary fines are imposed by courts as penalties for committing an infraction, misdemeanor, or felony.
  • Fees: User fees or costs are imposed to help government recover the costs of prosecuting, incarcerating, or supervising criminal defendants, or to otherwise pay the costs of the legal system. Examples include jury fees, expert witness costs, costs of extradition, costs of incarceration, and appointed defense counsel costs. Unlike fines, fees and costs are not intended to be punitive and the amount charged may be based on the cost of providing the service or based on a preset schedule.
  • Surcharges: Surcharges are a flat fee or percentage added to a fine to fund a particular government function, rather than being tied to the cost involved in prosecuting the defendant.
  • Interest, collection costs, payment plan costs, and penalties: If you do not immediately pay your fine, fee, or surcharge, the amount may grow with interest, collection costs, late payment penalties, and costs associated with a payment plan.
  • Restitution: A defendant pays restitution to compensate crime victims for losses suffered as a result of the defendant’s actions. Usually it is sent to the victim, but in some states it goes to a government agency.

Debts Owed to Private Companies. Surprisingly, many criminal justice debts are now owed to private companies rather than to the state. These private companies may offer and charge you for bail bonds, prison phone and video-calling services, debit release cards, probation, court-ordered rehabilitation programs, and GPS monitoring. Your rights may be different dealing with debts owed to a private company than to the government.

Who Is Now Seeking to Collect the Debt? Often the government, court, or private party that imposed the debt on you is the person who is now trying to collect on the debt. Other times, private debt collection agencies are even hired to collect debts owed the government.

Why You Must Pay Special Attention to Criminal Justice Debt

In some states, not paying criminal justice debts can result in your imprisonment. Outstanding criminal justice debt can lead to your arrest on debt-related warrants and your detention in jail while awaiting a hearing to explain the reasons for your failing to pay. Your payment also may be a condition of your sentence or probation, and your probation is extended until the debt is paid. Many “clean slate” programs that expunge criminal records require participants to have fully paid off their fines and fees.

If you have outstanding criminal justice debt, you may be required to appear at regular court review hearings, which can be disruptive of your other obligations. The government can also seize your tax refunds and bank accounts and part of your wages, offset your public benefits, and even seize your property. Government agencies can also hire debt collectors and report your debt to a credit bureau.

Unpaid criminal justice debt also can get larger over time, due to mandatory interest, penalties for late payment or nonpayment, or other collection costs that accrue from the date of judgment or missed payment. In some states, interest may even accrue when you are in prison or jail.

For these reasons, pay close attention to criminal justice debt. Both governments and private companies have the unique ability—beyond what is available to most other creditors—to enforce collection of criminal justice debt through the criminal legal system. These are high priority debts, which should be prioritized ahead of credit card, medical, and many other debts.

Carefully read any mail from courts or government agencies. Show up to court appointments, or contact the court as soon as you can if you can’t make that date. If going to court interferes with a job or otherwise is a hardship, ask about ways to make reports or payments to the court online or over the phone rather than in person. If you cannot pay criminal justice debts, explain to the court or government agency why you cannot pay. Talk to an attorney about ways to cancel or reduce your debt.

The Risks of Using a Bail Bondsman. If you cannot pay your bail, a bail bondsman may pay your bail, and charge you a premium of around 10% of the bail. You permanently lose this 10% even if you show up in court and even if you win the case. You also agree that you and anyone who guarantees your bail must repay the bondsman if you fail to appear and the bail is forfeited.

If the bail is forfeited, you or your guarantors who put up property as collateral for the loan may lose that property if the amount is not paid immediately. You and your guarantors are also likely to be subject to harsh and deceptive collection attempts, including threats to send arrestees back to jail without a legal basis to do so, forcing bail bond cosigners to turn over property that was used as collateral in cases where the arrestee complied with the terms of the bail, and threatening or apprehending individuals in order to coerce them to make premium payments. Bail bondsmen may seek to collect undisclosed or illegal fees and may engage in deception about the terms of the bail agreement and your legal options. Do not always believe what a bail bondsman tells you.

Defending Against Incarceration for Nonpayment of Criminal Justice Debt

If you face incarceration for nonpayment of criminal justice debt, you should seek legal counsel and press your constitutional rights. The government should not imprison you because you cannot afford to pay a debt. The U.S. Supreme Court has ruled that it is unconstitutional to imprison you for debt without a meaningful consideration of your ability to pay or the availability of alternative punishments.

Nevertheless, not all courts in practice consider your ability to pay and some do so only in a cursory or inadequate manner. This is where having a lawyer can help. You can ask the court to appoint a free attorney for you, or contact your local public defender office, legal services office, or bar association for help finding an attorney.

If you do not have an attorney, you should tell the court that you are unable to pay the court debt and should not be punished for that reason. Be prepared to explain why you cannot afford the debt, and to provide evidence of your inability to pay, such as proof of your income, necessary expenses for yourself and your family, receipt of public benefits, outstanding debts, and reasons you have been unable to work or to earn more, such as disability, incarceration, childcare obligations, or unsuccessful efforts to get a new job.

The more information and details you document the better. Documenting your financial circumstances is not an assessment of character. In most cases, honestly conveying financial hardship will help you and will not result in more jail time due to your inability to pay.

Keeping or Reinstating Your Driver’s License

Forty-three states and the District of Columbia suspend millions of drivers’ licenses for nonpayment of traffic violations as well as other criminal justice debts—even if you cannot afford to pay the fine. In many states, driving with a suspended license is misdemeanor offense that can lead to a criminal conviction, violation of probation or parole, and additional fines and fees.

Reinstating a suspended driver’s license can be an onerous process. Many states keep a suspension in place until you have either made full payment on your all criminal justice debts owed to the state or entered into a payment plan to do so. Some states also charge an additional reinstatement fee.

Contact the Department of Motor Vehicles in your state to find out what criminal justice debts resulted in your license being suspended and how to go about getting the license reinstated. Using this information, contact they appropriate court or state agency to whom the debt is owed. Ask how much you owe and whether you are eligible for a payment plan or payment alternatives like community service. If interest was accruing on the debt while you were incarcerated, you may ask to have the interest charges waived.

If your court debt is related to probation, parole, or a suspended jail sentence, you may want to check with a criminal defense attorney before contacting the court on your own. Although unlikely, it is possible that contacting the court about unpaid court debt could lead the court to take enforcement action against you.

Payment Plans and Other Ways to Delay or Reduce Payment

Especially with the assistance of an attorney, you may be able to reduce or even cancel (often called “remit”) your criminal justice debt, either in whole or in part. Alternatively, you may be able to enter into a payment plan—or modify a plan you are currently on—based on your financial situation or other relevant factors. In some states, courts may also be able to stop your payments altogether for a certain period if you are on public benefits or have little income.

Many states allow judges, based on financial hardship, to modify or cancel a criminal justice debt owed to the government. You can ask for this relief in a hearing to show cause for nonpayment, in a probation or payment status hearing, or through an affirmative petition to the court to remit the debt.

A payment plan might be a good way to manage payment of a criminal justice debt that you cannot afford to pay off all at once. Only agree to a payment plan you can afford. Be honest about your ability to make future payments. Ask about payment plan options as soon as possible; your ability to get into a payment plan may depend on how long you have been behind on your payments. In some states you must request a payment plan before your debt is sent to a collection agency.

Sometimes lawyers can work things out with a probation officer or other monitoring official to gain you more time to make a payment. Again, this is easier to do if you raise it as soon as possible.

Community Service As an Alternative. If you cannot get criminal justice debts waived, and are unable to pay them, in at least some states you can ask the court to consider community service instead of a fine or fee. Community services can be an excellent option for you if the work will be meaningful, promotes useful job skills or connections, and is reasonably convenient. But it is not for everyone, particularly if you have physical or mental disabilities, substance abuse issues, lack of access to transportation, or inflexible schedules due to work or child care obligations, or other responsibilities. If you have debts from different courts, it may not be possible to complete community service for each of them simultaneously.

Asserting Your Rights Against Collection

Statute of Limitations. In some states, after a certain number of years, you no longer have to pay your unpaid criminal justice debt. How many years this will be depends on your state—the answer is found in laws sometimes called “statutes of limitations” or “statutes of repose” or laws that say that after a certain number of years your criminal justice debt shall be “written off.” Federal court criminal justice debt, on the other hand, can be collected up to twenty years after the debt is imposed or you are released from incarceration on the underlying charge, whichever is later.

Protecting Assets and Income Against Garnishment. While governments can seize part of your wages, your bank account, and other assets to pay your criminal justice debt, there are limits to their ability to do so. As explained in a prior article, federal law protects most of your wages, payments for Social Security, Supplemental Security Income (SSI), VA, and certain other federal benefits, from seizure to pay criminal justice debt.

Whether a state court or agency can seize your state public benefits, your bank account, or even your home, car, or other assets is a more complicated question. The assets that state exemption laws protect vary by state, but may include state public benefit payments, tools of your trade, your home and car up to a certain value, and even a certain amount of cash. Nevertheless, in some states these exemption laws do not apply to the collection of criminal justice debt. Your best approach is to find a lawyer to help you understand how much of your income and property can be seized to pay your criminal justice debts and how much is protected from seizure.

Filing for Bankruptcy. Bankruptcy is a powerful tool for dealing with criminal justice debt. Filing bankruptcy can eliminate some of your criminal justice debt entirely and provide an orderly way for paying those criminal justice debts that bankruptcy cannot eliminate.

Bankruptcy can also allow you to take advantage of state programs to expunge or seal your criminal record that may otherwise be unavailable to you due to your outstanding criminal justice debt. A bankruptcy filing can also protect your driver’s license or vehicle registration from being suspended if that suspension is based on your nonpayment of traffic fines or other court debt that you can discharge in bankruptcy.

The relief you will receive from criminal justice debt by filing bankruptcy will depend on whether you file under chapter 7 or chapter 13. The purpose of a chapter 7 bankruptcy will be to eliminate or “discharge” certain debts entirely. A chapter 7 bankruptcy can discharge only certain criminal justice debt, but not most other types. It cannot discharge traffic debts, parking debts, and other fines and civil penalties. Also not dischargeable in a chapter 7 bankruptcy are criminal justice debts flowing from a court order for you to pay restitution. Parents can discharge restitution debts based on the actions of a juvenile.

More complicated is whether debt based on “costs” and surcharges are dischargeable in a chapter 7 bankruptcy, such as costs of prosecution, indigent defense fees, costs of probation, and surcharges assessed to a defendant. Also complicated is whether forfeited bail and bond debt owed either to the state or a bail bondsman is dischargeable in a chapter 7 bankruptcy. You should discuss these issues with a bankruptcy attorney.

A chapter 13 bankruptcy will offer more effective options for dealing with criminal justice debt. When you file a chapter 13 bankruptcy, you submit a plan to repay your creditors all or part of what they are owed. When you have successfully completed your chapter 13 plan, you receive a discharge that typically resolves much of your criminal justice debt.

In a chapter 13 bankruptcy, you can spread out payment for all of your criminal justice debt in installments over the life of your chapter 13 plan, typically from three to five years. In addition, with the exception of punitive fines or restitution entered as part of a sentence in a criminal case, you typically do not have to pay 100% of your criminal justice debts over the life of the plan. Instead you may have to pay only 10 cents or even zero cents on the dollar if your income is low enough and your assets fully exempt. For punitive fines and restitution you have to make full payment, but you can do so in installments over the three to five year length of your chapter 13 plan.

Seeking Legal Advice. If you have low or no income, you may be able to obtain free legal representation on criminal justice debt issues, particularly if you are facing incarceration for nonpayment. If you were represented by a lawyer in a criminal case in which the fines, fees, or other debts were imposed, you may want to contact that lawyer. Your lawyer may be able to represent you or at least counsel you about your options for dealing with the debt, or refer you to another lawyer who can. If you were not represented by a lawyer when the debt was imposed, you may want to look into whether legal help is available by contacting the court that imposed the debt or the local public defender’s office.

Legal services offices, pro bono attorneys affiliated with local bar associations, and other civil attorneys may also play important roles in representing clients in collection-related proceedings—including when incarceration is a potential risk. Attorneys with expertise in debt collection actions and in representing indigent clients may provide a valuable service by defending clients in collection actions or representing them in hearings related to criminal justice nonpayment. Additionally, legal services and pro bono attorneys may provide valuable representation in affirmative proceedings to modify a debt obligation or repayment plan.