Does Bankruptcy Write Off Criminal Fines or Restitution? Bankruptcy does not write off criminal fines or restitution. The “automatic stay,” which stops almost all other collection actions, does not stop any criminal court proceedings.
There is a big division in the law is between criminal and civil matters. Criminal law is just one relatively small side of the law. The civil side includes everything else. It includes the law of contracts for buying consumer goods and for creating debts, the law of marriage and divorce, rules about labor and employment, the rights and obligations related to vehicle accidents and all other personal injuries and property damage, as just a few examples.
Criminal charges against you sometimes spill over into the civil side. You may find yourself dealing with fallout from your alleged criminal actions that go beyond the criminal court. This is where bankruptcy may be able to give you some serious help.
Specifically, once a criminal case is resolved you could face a lawsuit by the alleged victim in civil court. This can happen even if you succeed in having the criminal charges dropped.
Let’s say you had a fight with your now-ex-spouse not long before your divorce. Unfortunately, it got physical. A few days later a mysterious fire destroyed your ex-spouse’s vehicle and garage and damaged her house. You know nothing about the fire and believe your ex-spouse is trying to frame you. Criminal charges are brought against you for assault and battery, and arson. You go through an exhausting criminal trial, with the help of a good criminal defense lawyer. You are found not guilty of any of the criminal charges, because you in fact had nothing to do with the fire, and the jury found you to be much more credible than your ex-spouse.
But that’s not good enough for your all-the-more enraged ex-spouse. He or she sues you for civil assault and battery from the fight, for severe emotional distress from the fire, and for $200,000 property damage for the vehicle and to the real estate. You are at risk of owing a tremendous amount of money.
Your lawyer tells you that winning in criminal court does not at all mean you will win in civil court. There is a lower standard of proof on the civil side. Proving your fault by “a preponderance of the evidence” is much easier than “beyond a reasonable doubt.” Basically, whichever side has a more convincing story wins. Your criminal jury found reasonable doubt on all the charges. But your lawyer advises you that there is still a serious chance you could lose in civil court.
Besides that, paying for your criminal defense has more than tapped you out. In fact you’re in serious debt trouble overall, from the combination of the divorce and the criminal battle. So you are thinking about filing bankruptcy because of all the financial pressures. You wonder if it can help with this lawsuit by your ex-spouse as well.
The Major Ways Bankruptcy Can Help
- Automatic stay
If you filed a bankruptcy case, that would at least stop the civil court litigation temporarily. Your ex-spouse would have to get permission from the bankruptcy judge to continue with the civil lawsuit. He or she would likely have to hire a new bankruptcy attorney to do so. This would be an extra expense. It would put a pause in the litigation. His or her bankruptcy lawyer may help your ex-spouse see that lawsuit is a waste of time and money. These might be enough to have him or her decide to stop spending money on this.
- Proof of your actual finances
Part of your ex-spouse’s motivation may be some expectation that you have hidden assets with which to pay damages. Assuming you really don’t, your bankruptcy documents should make that case for you quite persuasively. That paperwork, filed under oath in your bankruptcy case, will paint a thorough and honest picture of your finances. It will convincingly show that you have little worth chasing. This reality should catch the attention of his or her lawyer. The lawyer’s self-interest will make him or her concerned about investing too much in chasing you. Even if your ex-spouse is very angry, he or she may be convinced that continuing to fight is not worthwhile.
- More difficult elements to prove
When you file your bankruptcy case, you immediately make it harder for your ex-spouse to win against you. He or she doesn’t just need to show that under the law you’ve caused damage to her person or property. In other words, your ex-spouse doesn’t just need to win the state court lawsuit. In addition now he or she must also show that this debt you owe fits within some limited categories of debts that are not discharged (written off) in bankruptcy.
Your actions must be determined to have been “willful and malicious” Otherwise the ex-spouse’s claim against you would be discharged (legally written off forever). That generally means that your actions must be found to have been intentional and been done without any just cause or excuse. This makes it harder for your ex-spouse to make you pay anything. His or her lawyer will be obligation to advise him or her about this.
Once your ex-spouse and his or her lawyer are forced to pause in the litigation, see the truth of your finances, and realize that your bankruptcy has created an additional major hurdle to getting anything out of you, they may well decide that the lawsuit against you will not succeed. And even if they keep pressing ahead, your bankruptcy will make it harder to prevail against you.
Schedule a Free Consultation with Your Portland Bankruptcy Attorney
When it comes time to file for bankruptcy, you need a compassionate and skilled attorney who will be able to guide you through the process as cleanly as possible. Northwest Debt Relief Law Firm, we can help you with filing for Chapter 7, Chapter 11, and Chapter 13 bankruptcy in Portland, Oregon. We will be there every step of the way to help navigate you through the often-complex and difficult bankruptcy process.
Give us a call at (503) 912-8809 to schedule a free consultation with one of our bankruptcy attorneys. If you have any other questions about bankruptcy, one of our attorneys will be more than happy to offer advice on your particular situation.