Restitution & Bankruptcy
Restitution is money paid by a convicted criminal to the victim's family or loved ones to reimburse them for out-of-pocket expenses they had to pay as a result of the criminal's actions. Restitution is ordered by a criminal court.
Bankruptcy is when a person does not have the money or assets to pay off their debts. If bankruptcy is declared, a court seizes any assets a person does have and turns them over to a trustee who will use them to pay off creditors.
Other People Are Reading
-
Filing for Restitution And Bankruptcy
-
Restitution must be requested by the victim's survivor's, family, loved ones or even their company or employer and should be petitioned for as early as possible in the criminal proceedings against the offender according to Criminal Justice Intervention's "Restitution."
For a prisoner to file for bankruptcy, they must petition a court or have their already-designated trustee do so.
What restitution and bankruptcy cover
-
Restitution only covers losses that were a direct result from the criminal offender's actions. This may include medical bills or funeral costs and sometimes, though not always, psychological counseling. Sometimes only costs not already covered by insurance will be ordered by a court to be paid.
Money owed to the federal government, which in the case of prisoners may include court fees and fines, will still be owed even after being declared bankrupt. Restitution is also not covered by bankruptcy, according to the California State Department of Corrections and Rehabilitation's "An adult offender's guide to restitution," which cites Federal Statute Federal Statute 11USC §523 (a) (7).
-
Where Money Goes
-
Money paid for restitution will usually go into a state Victim's Fund to be paid to the recipients in monthly installments.
Assets seized through a bankruptcy proceeding will be sold off when applicable and the proceeds paid to various creditors.
Determining Restitution And Bankruptcy
-
A court will decide the amount of restitution owed and whether a person is bankrupt based on already-established state and federal guidelines.
Bankruptcy is generally declared when a court determines that the total amount of a person's assets are not enough to cover all the person's debts.
A prisoner may contest the amount of restitution being ordered by the court, in which case a separate hearing is held.
How the money is collected
-
In bankruptcy, a person voluntarily or involuntarily relinquishes any assets to be sold or liquidated.
Restitution payments are collected a variety of different ways depending on the offender's status and financial resources. In some cases, an offender on parole may have paychecks garnished and the money is put into a state victim's fund or paid to the District's Attorney office where the money is forwarded to the recipients.
Unpaid restitution will result in the offender being sent to a collection's agency and considered in violation of their parole.
-
References
- Photo Credit the prisoner image by Hunta from Fotolia.com
