The bankruptcy discharge can wipe out a wide range of different types of debt. This includes credit cards, medical bills, personal loans, repos, and even old taxes. However, there are a range of non-dischargeable debts in bankruptcy. One of the types of nonchargeable debts are for penalties, fines, and restitution.
Criminal restitution is never dischargeable in bankruptcy. You may be forced to pay criminal restitution if you have been convicted of a crime (or plead guilty) which caused damage or loss of property. Restitution results in you having to repay the victim over a period of time. It is the policy of bankruptcy law that these victims should not have their payments discharged through a bankruptcy. In practice, this is quite rare, and very few bankruptcy filers are in the midst of criminal restitution.
A more common occurrence is a bankruptcy filer who is in the midst of paying penalties or fines for something like a DUI. These fines are also not discharged. There may be some question as to whether or not these fines can be collected during the duration of the bankruptcy, but either way they must ultimately be repaid.
The most common penalties and fines that I see fairly often with my clients involves things such as parking tickets and turnpike tolls. Most drivers have received a parking ticket or an unpaid told at some point in their life. These will not be dischargeable in bankruptcy, and must be repaid. In general, if it is money owed to the government for some type of penalty, it will normally not be discharged in bankruptcy.
If you are considering filing bankruptcy or have questions about it, or what is dischargeable, call us at 412-414-9366. I would be happy to set up a free consultation and discuss your situation.