Can bankruptcy get rid of my court fines and criminal restitution?

No.

Bankruptcy generally discharges everything, with the exception of priority debts, which include most taxes, child support/alimony, student loans, and criminal fines and restitution.

This means that your court fines and restitution will survive bankruptcy.

Today I met with a client who embezzled $120,000 from his former employer and is paying back $1,000 a month as part of a restitution payment.  Bankruptcy won’t affect this.  He still owes the $120,000.

When the IRS found out about the $120,000, they made him amend his tax returns to include this income, and he has about $30,000 in back taxes for his personal income tax liability.  I think that we can discharge the personal income taxes, because he has filed the returns more than two years ago and the taxes are more than three years old.  The only thing that may trip him up is that he was arguably committing willful fraud and evasion when he failed to report the embezzled income originally.

So, he owes the criminal amount but may be able to discharge the taxes.

This is not legal advice.  If you need help go to www.robertspaynelaw.com.

Leave a Reply