11.5.3.12 Interest and Collection Costs

Interest on criminal justice debt has generally been found to be dischargeable only to the extent the underlying debt is dischargeable.³²⁹ Flowing from this, to the extent interest is generated upon an indigent defense fee balance that is dischargeable, the interest should also be dischargeable.

Third-party collection by private contractors of criminal justice debt often involve these collectors receiving their fee off the top of the debtor’s delinquent balance. These fees can be as high as 40% of the total amount owed.³³⁰ Collection fees imposed by private debt collectors have been found dischargeable, as they are not due and owing to governmental entities, nor are they in and of themselves punitive.³³¹ The latter part of this logic would seem to hold true for collection costs imposed by governmental collectors as well, although there do not appear to be any cases clearly discussing this distinction.