Bankruptcy doesn’t write off criminal fines, fees, or restitution. So why think about bankruptcy if you have, or expect to have, such debts?
Bankruptcy is sometimes simplistically thought of as merely a legal procedure for wiping out all of your debts. But a large percentage of bankruptcy cases do not do that. Even in a Chapter 7 “straight bankruptcy,” there is very often a debt or two either that cannot be discharged (legally written off)—such as a recent income tax obligation–or that you choose to pay—such as a mortgage or vehicle loan. As for the Chapter 13 “adjustment of debts,” as that phrase indicates it is all about favoring certain special creditors while paying less—and sometimes nothing—to other creditors. In addition, in both types of cases, a big part of the motivation for filing is so that you’ll have the money to pay necessary expenses instead of having it all go to the creditors.
So, often the main purpose of filing bankruptcy is so that you can pay little or nothing on some debts in order to be able to pay other more important debts.
If you have a criminal conviction requiring you to pay a criminal fine, fees, or restitution, you have no more important debts than those.
And if you are fighting to avoid a criminal conviction, you have no more important necessary expenses than your criminal defense costs.
Bankruptcy can be your absolutely indispensable tool for focusing your financial resources on taking care of your criminal fines, fees, and restitution; or in advance of that for paying your attorney and other defense costs in an effort to avoid or lessen those criminal debts, as well as any potential incarceration.
Discharging Your Non-Criminal Debts
If you have been charged with any significant crime, you likely have to dedicate all your possible resources on paying for your defense attorney. Especially if you have a serious risk of incarceration, you need to get creative and do everything you can to generate the needed funds, including selling assets and/or not paying your creditors. Often the quickest way to get rid of your debts and quickly improve your cash flow is by filing a Chapter 7 bankruptcy.
Or if your criminal case has already resulted in a conviction, you likely have some absolutely mandatory financial obligations to pay to the criminal justice system. You could owe a criminal fine, restitution, probation/supervision fees, treatment costs, community service fees, and drug and electronic monitoring charges. The fine and restitution could be huge, and the ongoing fees and costs can take a big bite out of your monthly income as well. If you don’t pay these as your conviction judgment requires, you risk potential incarceration, or re-incarceration if you have been paroled or conditionally released. A Chapter 7 or Chapter 13 case could clear enough of your other debts so that you could pay the required criminal obligations.
Be Able to Pay Required Non-Criminal Debts and Expenses
In certain circumstances the criminal court will directly or indirectly require you pay other kinds of debts or expenses related to your criminal conviction, other than the ones owed directly to the criminal system. For example, you may have to maintain consistent employment, do scheduled community service, personally meet with your parole or probation officer, and/or attend treatment or classes, all of which may effectively require you have a car, in turn requiring you to keep current on your vehicle payments and insurance. Filing bankruptcy can make it possible for you to pay these kinds of debts or expenses when you could not afford to do so otherwise.
To emphasize again, bankruptcy can let you concentrate your financial energy, and therefore your emotional energy, where it absolutely needs to be concentrated—on your criminal case. If you are being confronted by a serious criminal charge, or have already been convicted, bankruptcy may well be a surprising but crucial part of your game plan.