A guide to discharging criminal justice debt in bankruptcy
INTRODUCTION
Bankruptcy offers debtors “a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of pre-existing debt.” Certain types of debt resulting from fines, fees, and other costs imposed on people accused of an infraction, misdemeanor, or felony however are categorically non-dischargeable under the Bankruptcy Code. Such debt is referred to as “criminal justice debt” or “court debt.” Specifically, criminal fines imposed in a sentencing order are excluded from discharge. Further, victim restitution orders in criminal cases are generally nondischargeable and courts vary on whether other types of fees and costs are non-dischargeable. Governments and courts often employ draconian debt collection tactics to collect on such criminal justice debts, including the threat of actual incarceration for nonpayment of debt, the suspension of drivers’ licenses, and the denial of the right to vote. Low-income families lacking the resources to manage the financial shock of such debts are left without a safety net and stuck in a cycle of poverty.
The Bankruptcy Code’s limitations on the dischargeability of certain criminal justice debt hinder the ability of debtors to gain a true “fresh start.” Reform of the Bankruptcy Code is needed to help alleviate the excessive court fees and fines imposed on many debtors. Until any such reform occurs, however, advocates should understand whether bankruptcy can eliminate the obligation to repay certain criminal justice debts or provide an orderly mechanism for repaying debts that cannot be discharged. Certain criminal justice debt should arguably be dischargeable in a bankruptcy, opening the door to relief such as the expungement or sealing of criminal records, which may otherwise be unavailable due to outstanding criminal debt. Bankruptcy could also prevent government entities from withholding drivers’ licenses and vehicle registrations based on the nonpayment of dischargeable traffic fines or other court debt.