Filing for bankruptcy is available to everyone including people with criminal records. Filing for bankruptcy with a criminal record can clear up any unnecessary debt from creditors and leftover money to put towards the debtor’s criminal financial obligations. However, bankruptcy does not discharge any criminal restitution payments. One of the benefits of filing a Chapter 13 bankruptcy is that it provides debtor’s the opportunity to pay off criminal restitution debt over time, or even enter a plan that can reduce the minimum monthly required payments.
The exception to the rule is felonies that are financial or fraud-related due to issues with exemption qualifications with the bankruptcy court. Bankruptcy fraud is a white-collar crime that is committed by concealing assets to avoid having to forfeit them, illegally modifying documents, and bribing court officials. Admitting false information on a bankruptcy form may constitute perjury. These offenses would lead to legal consequences such as the dismissal of the debtor’s case, a denial of discharge, the prevention of filing in the future, up to 20 years in federal prison, probation, community service, and a repayment process for all fines.
Cited Sources
- Freeman, Mary Jane. “Can I File Bankruptcy With a Felony?” Legal Beagle, 18 May 2020, legalbeagle.com/12333694-can-file-bankruptcy-felony.html.
- Cara O’Neill, Attorney. “Bankruptcy Fraud Consequences and Penalties.” nolo.com, Nolo, 27 Oct. 2020, www.nolo.com/legal-encyclopedia/bankruptcy-fraud-consequences.html.
“Criminal Fines and Restitution Not Discharged in Bankruptcy.” Wasson & Thornhill, 24 Feb. 2019, wassonthornhill.com/criminal-fines-restitution-not-discharged-bankruptcy/.