Juvenile Restitution Discharged in Chapter 13 Appeals Court Rules

12 Jul Juvenile Restitution Discharged in Chapter 13 Appeals Court Rules

Restitution ordered in juvenile delinquency proceedings is dischargeable in chapter 13 bankruptcy, the U.S. Court of Appeals for the Tenth Circuit ruled in the case of In Re Sweeney, No. 06-1224, July 11, 2007.

Shea Thomas Sweeney was adjudicated a juvenile delinquent at age 12 for arson. As part of his sentence, he was ordered to pay $89,202.10 in restitution.

Eleven years later, Sweeney filed for Chapter 13 bankruptcy. He listed $85,000 in unpaid restitution. The State of Colorado challenged his discharge.

Generally, adults cannot discharge criminal restitution in chapter 13 bankruptcy because restitution included in a sentence on the debtor’s conviction of a crime is automatically excepted from discharge under 11 U.S.C. section 1328(a)(3).

The State of Colorado argued that being found guilty under juvenile delinquency laws is the same as being convicted of a crime. The bankruptcy court agreed and denied the discharge of the restitution. Two levels of appeals court said no, juvenile delinquency is an adjudication of status, not of guilt, and not considered a conviction of a crime under 1328(a)(3).

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Jill Michaux has helped Kansas consumers with debt problems for three decades. She and her partner, Mark Neis, are Topeka's only bankruptcy specialists, board certified in consumer bankruptcy law by the American Board of Certification. She help start the National Association of Consumer Bankruptcy Attorneys.
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