Articles Posted in Criminal Restitution

No. If you have been convicted of a crime you can still file bankruptcy. The bankruptcy papers don’t ask you questions like that. A criminal record would only be an issue if you were trying to file bankruptcy to get rid of fines or restitution. You can’t wipe out court fines and criminal restitution in bankruptcy. However, a chapter 13 bankruptcy would allow you to make your restitution payments over a 60 month period if you were having trouble making the payments ordered by the court that convicted you.

Willful and malicious injury debts are rare, but they happen when someone has placed a claim against you, stating that you intentionally hurt them or their property.  In the Fifth Circuit Court of Appeals (which includes Mississippi), a “willful injury” is one where the debtor purposefully caused the injury, and didn’t just purposefully perform the act that resulted in harm to the person or property.  A “malicious injury” is when injury results “without just cause or excuse”.

You can discharge (wipe out) debts for willful and malicious injury to property in a Chapter 13 bankruptcy but not in a Chapter 7.

You can discharge (wipe out) debts for willful and malicious injury to a person in a Chapter 13 but the Chapter 13 must be filed before the state court action has gone to judgment. You cannot discharge (wipe out) this type of debt in a Chapter 7.

Debts stemming from a fine, penalty, or forfeiture payable to and for the benefit of a governmental body, (other than a tax penalty in some cases), cannot be discharged by bankruptcy. Criminal restitution in all forms will have to be paid in full; however, filing a Chapter 13 bankruptcy can be used to stretch the payment of the restitution out over a 60 month (5 year) period. Extending these payments can be significantly lower than the monthly restitution payments as set up by the court. There may be situations where the restitution cannot be paid in full through the maximum period allowable in a Chapter 13 bankruptcy, so the debtor may need to do 2 or more Chapter 13 cases back to back. This would provide for repayment of the restitution over a longer period of time than the 60 months (5 years) allowed in a single Chapter 13 bankruptcy case.