What happens to my court fines or orders of restitution when I file for Bankruptcy?
A fine is a criminal penalty payable to a municipality, like a county or city, or the court system. It happens when you are punished. Examples here are speeding, reckless driving, assault and battery.
Restitution is part of a criminal case, in which you have to pay someone back. Examples of cases where you would have restitution would be stealing or embezzlement. In those cases, the judge may sentence you to jail and tell you that you have to pay someone back for the money you took. You may also have to pay a fine to the court.
If you owe money to a person or company, because you did something wrong, or because you broke a promise, that is a debt, not a fine. Examples here are car wrecks, credit cards, even after you go to court, and deficiencies for car loans.
What happens to them? Well, that depends on what kind of Bankruptcy you filed.
If you filed a Chapter 7 or Liquidation Bankruptcy, then the court fines and orders of restitution are unaffected by your Bankruptcy. They continue on along just the same as if you had never filed for Bankruptcy. If you do not pay, they can suspend your license, or put you in jail for contempt.
If you filed a Chapter 13, the effect on your fines and restitution is interesting. Because fines and restitution are not dischargeable in bankruptcy, they can be paid over time in your Chapter 13 Bankruptcy. It is important to know that any amount that is not paid will not be discharged, even if they do not file any request to determine that it is so.
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Krumbein Consumer Legal Services, Inc.
5310 Markel Rd.
Richmond, VA 23230