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11.5.4.2 Criminal Justice Debt Subject to Discharge Under Chapter 13

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  6. 11.5.4.2 Criminal Justice Debt Subject to Discharge Under Chapter 13

11.5.4.2 Criminal Justice Debt Subject to Discharge Under Chapter 13

In contrast to the complicated exception analysis applicable to chapter 7, the application of chapter 13 to criminal justice debt is straightforward. Under chapter 13 all criminal justice debt, except punitive fines or restitution337 entered as part of a sentence in a criminal case and certain federal criminal fines,338 is generally dischargeable upon successful completion of a chapter 13 plan. Types of criminal justice debt that have been classified as dischargeable in chapter 13 include court costs339 and costs of prosecution.340

Fines and restitution must be included in a criminal sentence in order to be excepted from discharge, which means that discharge may be had if the advocate can successfully argue that the underlying nature of the action is not criminal. Mere association with a criminal act is not enough to invoke the discharge exception.341 However, “conviction of a crime” has been interpreted broadly to include a guilty plea followed by probation, without formal conviction.342

Municipal court fines and traffic fines are frequently found to be dischargeable under chapter 13 if the underlying nature of the action is determined to be civil rather than criminal.343 Juvenile delinquency restitution debt has been found dischargeable given that a juvenile adjudication is considered non-criminal under federal and state law, notwithstanding the fact that the underlying conduct was analogous to criminal conduct.344 However, simply because a restitution judgment is civilly enforced or assigned to a third party does not mean it is dischargeable.345

Footnotes

  • 337 See In re Montalto, 2005 WL 8172585, at *3 (W.D. Wash. 2005).

  • 338 See 18 U.S.C. § 3613(e).

  • 339 In re Hardenberg, 42 F.3d 986 (6th Cir. 1994).

  • 340 In re Ryan, 389 B.R. 710 (B.A.P. 9th Cir. 2008). But see In re Bravo, 582 B.R. 227, 237–238 (Bankr. W.D. Wash. 2018) (“components of the claim attributable to court-appointed attorney fees and defense costs were penal in nature and so constituted a ‘criminal fine’ for nondischargeability purposes”).

  • 341 In re Fleisch, 543 B.R. 166 (Bankr. M.D. Pa. 2015).

  • 342 Wilson v. Cumis Ins. Soc’y, Inc. (In re Wilson), 252 B.R. 739, 742 (B.A.P. 8th Cir. 2000).

  • 343 In re Raphael, 238 B.R. 69 (D.N.J. 1999); In re Osorio, 522 B.R. 70 (Bankr. D.N.J. 2014); In re Colon, 102 B.R. 421 (Bankr. E.D. Pa. 1989). See also In re DeBaecke, 91 B.R. 3 (Bankr. D.N.J. 1988) (insurance surcharges imposed for traffic violations are dischargeable debts under chapter 13).

  • 344 In re Sweeney, 492 F.3d 1189 (10th Cir. 2007).

  • 345 In re Bova, 326 F.3d 300 (1st Cir. 2003).