Research Project II (Criminal Fines and Restitution)

[HHM]

Question:
Are debts that are Criminal Fines or Restitution considered Non-Consumer debt such that if these fines or restitution represented more than 50% of the debtor's debt, could he bypass the means test.

As before, I am not asking for speculation, please try to find a case or other resource.

Note, Criminal Fines and Restitution are non-dischargeable, the issue is whether they are/can be classified as non-consumer debts for the purposes of the Means Test

[justbroke]

I haven't heard anything back on the first challenge question.

[HHM]

Actually, these projects are not "tests", I really am looking for some answers

[HHM]

So, this one is the stumper

[justbroke]

Yes it is. While I have some opinions on it, I could find no caselaw to support my position.

[catleg]

I know a guy who just got sentenced to 30 months of federal time and 800k+ of restitution so I'll let you know how it works out.

[NSH]

I can't imagine that a fine or restitution in a criminal case, particularly one involving some sort of a plea bargain, would be discharged in a bankruptcy. Obvously I have no hard knowledge whatsoever on this topic, as I am not a lawyer or even a CPA, but it seems to me that if a defendant makes a plea deal where they agree to pay a certain amount and this amount gets discharged in a BK, wouldn't that mean the person (now convicted and sentenced, and let's say not in jail because of the plea arrangement) would be in violation of their plea agreement?

[Klesko]

Restitution as part of a criminal case is not dis chargeable. Even if it was under and it was with a plea agreement the person would be in violation of that agreement and could go to jail.

[NSH]

Yeah, that was kind of what I was assuming with my post, though your post sounds like you are speaking from actual knowledge, where I was just offering an uninformed opinion. ;)

[Klesko]

Yes I am speaking from personal experience on the matter...

If they were dis chargeable then people would agree to whatever and then declare BK. Kinda like why student loans are not dis chargeable. People would rack up 100k+ in student loans and then declare BK right after they secure a job after graduation.

[NSH]

Ah, okay. I thought that Student loans were no dischargable because they were government guaranteed. Shows what I know, lol.

Also, a little off topic, but someone once told me that you can wipe out a substantial portion of your Student Loan if you file a Chapter 13. Is tha true?

[DebtEnder]

I think asking about student loans in this thread is a bit off topic but I did read a case decision where a debtor had a chap 13 plan where he did pay back a portion of his student loans through the plan. When the plan was completed the debtor argued that since the student loans were paid via the plan and the plan completed he was eligible to discharge all debts in the plan, including his student loans. The court agreed.

I found the link to the post on this forum which has a link to the article http://www.bkforum.com/showthread.ph...r+13+discharge


student loan debts can be discharged by way of a Chapter 13 plan if the creditor does not object, after receiving notice of the proposed plan . . . and that such notice is not constitutionally inadequate.

In other words if the student loan creditor does not object at time of plan confirmation they agreed to the plan which means all debts in the plan are otherwise discharged at plan completion unless otherwise stated.

This ruling was in San Diego so YMMV