Do the Crime, Pay the Fines: Criminal Debts are Non-Dischargeable Debts

We wrote recently about student loans and how, for the most part, they cannot be discharged during the bankruptcy process. This week, we discuss other debts that fall into the non-dischargeable category, starting with criminal restitution and fines.

Chapter 7 and Chapter 13 do not discharge criminal debts and restitution. Restitution is money owed for negligent or criminal conduct. If you’re involved in a DUI accident that results in a serious injury, for example, and you are ordered to pay court costs and restitution, you cannot discharge these debts through the bankruptcy process.

In an unusual occurrence this month, an investigator working for the Florida Office of Financial Regulation wrote a letter to a bankruptcy judge asking him to delay the discharge in a bankruptcy case, because the married couple who filed bankruptcy may face criminal securities fraud charges.  Richard and Sharon Pizzuti filed Chapter 7 bankruptcy with over $8 million in debt, and the investigator’s letter claims that these debts could “constitute the proceeds of the criminal securities fraud case.”

The Pizzutis’ bankruptcy attorney has rightfully requested that this letter be stricken from the bankruptcy court records; if no criminal charges are currently pending against the Pizzutis, the investigator’s ex parte communication with the judge was out of line. However, most cases are cut and dried – if you owe restitution, you cannot discharge it in your bankruptcy. All the same, if you owe restitution or criminal fines, it still may be in your best interest to contact a bankruptcy attorney, especially if you’re struggling to make payments. You could discharge other debts, thus making it easier to pay fines and restitution.

Get deserved relief today.  If you’re struggling through hard times, contact our office now for a free consultation.

Law Firm of Kevin D. Judd– Washington DC bankruptcy attorney

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