The Bankruptcy Code does not pertain to criminal court restitution orders. Criminal restitution is amount that the offender must pay to the victim to compensate the financial losses suffered by the victim as a direct result of the offense. It is a monetary debt that the offender owes to the victim.
Bankruptcy does not stop restitution even when defendant’s civil obligations to the victim were discharged by bankruptcy before criminal charges were filed. Since collection of restitution is a continuation of a criminal action, the automatic stay provisions of bankruptcy law do not pertain. Therefore a person seeking bankruptcy protection will not be safeguarded from the payment of restitution.
A restitution obligation required as a condition of probation is not dischargeable in a liquidation or straight bankruptcy proceeding under Chapter 7. The courts have held that civil restitution judgment originally imposed as a condition of debtor’s probation not dischargeable under Chapter 7 nor is a restitution obligation dischargeable under Chapter 13.
The bankruptcy discharge does not discharge the obligations to the debtor arising from the unlawful operation of the motor vehicle like driving under the influence of alcohol or drugs (DUI). Death or personal injury caused by the debtor’s operation of a motor vehicle, vessel, or aircraft if such operation was unlawful because the debtor was intoxicated from using alcohol, a drug, or another substance, then the debt will be deemed non-dischargeable. The creditor/victim also does not need to do anything special in the bankruptcy court as this type of non-dischargeability is automatic. Furthermore, in drunken driving cases, the restitution for medical bills when injury is alleged will not be stopped just because a defendant has filed Bankruptcy.