One type of debt that many people are faced with are criminal fines. This category can include fines, fees, surcharges or any other costs assessed by the courts, various administrative agencies or other entities. It is important to determine just what type of debt you are faced with:
1) Fine: (this type of debt is normally imposed by a court as a penalty for committing an infraction, misdemeanor or felony); or
2) Fees: (this type of debt is an administrative fee, such as a user fee that is designed to recoup the costs of various types of actions, such as prosecution, incarceration, supervision of criminal defendants or other actions); or
3) Surcharges: (this type of debt is usually a flat fee or percentage that is added to a fine to fund a particular government program); or
4) Interest, collection costs, payment plan costs and penalties: (these are additional costs, such as interest, collection costs and late fees that may be assessed as part of your fine, fees or surcharges due to delinquent or late payments); or
5) Restitution: (this type of debt is imposed by the court to remburse the victim for the damage he or she has suffered by the actions of th defendant).
These types of debts cannot simply be ignored in hopes that they will go away. Non-payment of these debts can have serious consequences. Filing bankruptcy can be an orderly way of dealing with these debts. The type of bankruptcy you file will often determine whether you can readjust or even eliminate the particular debt.
Fines are generally not dischargeable in a Chapter 7 Bankruptcy. The particular section of the Bankruptcy Code states that a debt is not discharged to the "extent such debt is for a fine, penalty, or forfeiture payable to and for the benefit of a governmental unit, and is not compensation for actual pecuniary loss". It is important to point out that to be nondischargeable the debt must be owed to a governmental unit. Also, if the debt is of a punitive nature, then the exception to non-dischargeability does not apply. A Chapter 13 Bankruptcy
Many penalties and fines are dischargeable in a Chapter 13 Bankruptcy.