The financial difficulties resulting from a criminal matter are one of the many reasons that people file for bankruptcy. Many criminal matters result in court fines being assessed against the wrongdoer. Clearing, or discharging, court fines by filing bankruptcy sounds like a great way to resolve that problem. Not so fast. In general, fines that are meant to be a form of punishment that are owed to a governmental entity are not dischargeable in bankruptcy. However, if the fine was really imposed to reimburse the government for expenses it incurred, those fines may be dischargeable. In short, it depends on the intent of the government in imposing the fine. Whether dischargeable or not, a bankruptcy can still help if you are faced with court fines.
Court Fines As Punishment
There are many different types of court fines. Court fines can include things such as traffic tickets, restitution, or building code violations. If the purpose of the fine is to punish, then the fine is not dischargeable in bankruptcy. For a traffic ticket or restitution, the government is punishing you for violating the law, so that fine would not be discharged in a bankruptcy case.
The fine must be owed to a governmental entity. This could be the federal, state or city. It could also be an entity acting on behalf of the government, such as a tollway authority.
Whether a fine is classified as punishment may depend on where you are. Some cities classify parking tickets as criminal, others don’t. It is important to consult an attorney familiar with the laws in your area.
Court Fines As Reimbursement
Court fines, such as some building code violations, are really seeking reimbursement for expenses. Let’s say the city sends you a notice that your lawn has not been mowed and you are in violation of city code. You still don’t mow your lawn and eventually, the city sends someone out to mow it. You then get fined for not mowing your lawn. That fine is really the city trying to get re-paid for having to pay someone to mow your lawn. Fines that are really seeking reimbursement for expenses are dischargeable in bankruptcy.
Bankruptcy Can Help In Other Ways
If your driver’s license has been taken away for failing to pay fines, a Chapter 13 bankruptcy filing may help. A Chapter 13 lets you propose a repayment plan. Many states will allow you to get your license back if you can show that you have a repayment plan in place. Competent counsel will be able to help you through the process to get your license back.
A bankruptcy filing can also help you get rid of other debt so that money can be freed up to pay fines and other non-dischargeable debts. It can also free up funds to pay for your criminal defense, if necessary.
The resolution of many criminal cases comes with stipulations such as keeping a steady job, performing community service or attending counseling or treatment programs. Reliable transportation is essential to meet these other requirements. Discharging other debt can free up funds to maintain the reliable transportation that you need. It can free up funds to make car payments, pay for insurance or pay for public transportation.
Questions for Your Attorney
• Is the fine that I owe dischargeable in a bankruptcy?
• Will a Chapter 13 filing help pay my fines?