Central District Consumer Bankruptcy Attorney's Association

Brief summary of one case:
Balance of restitution is close to $60,000.
It involved a misdemeanor hit and run - debtor was driving an 18-wheeler
and claims he didn't "run"; the 18-wheeler's inertia required more room to
stop but he did stop as soon as possible to the truck. I guess he was
represented poorly. In any event, he now writes the checks under the name
of the "victim" and the checks are sent to the "victim". The monthly amount
set by the Court is $2,900 while his entire monthly income is $1,500. OC
issued a warrant for his arrest. *The questions are whether a Chapter 7
will [1] stay (which I think the answer is yes) and [2] discharge it:*
As to whether the language of Section 523(a)(7) would discharge the above
restitution order. The language says:
*(a)* A discharge under section 727, 1141, 1228(a), 1228(b), or
1328(b) of this title does not discharge an individual debtor from any
debt--
*(7)* 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, other than a tax penalty--
*(A)* relating to a tax of a kind not specified in paragraph (1) of this
subsection; or
*(B)* imposed with respect to a transaction or event that occurred before
three years before the date of the filing of the petition;
11 U.S.C.A. 523 (West)
Most authorities, including the Rutter Guide say that its not
dischargeable by being a criminal restitution and cite *Kelly v.
Robinson,* 479 U.S. 52 (1986).
In *Kelly*, the Supreme Court held that restitution obligations imposed as
probation conditions are not dischargeable in bankruptcy proceedings. *See
Johnson,* 983 F.2d at 220. According to the Court:
The criminal justice system is not operated primarily for the benefit of
victims, but for the benefit of society as a whole. Thus, it is concerned
not only with punishing the offender, but also with rehabilitating him.
Although restitution does resemble a judgment for the benefit ofvictim, the context in which it is imposed undermines that conclusion. The
victim has no control over the amount of restitution awarded or over the
decision to award restitution. Moreover, the decision to impose restitution
generally does not turn on the victim's injury, but on the penal goals of
the State and the situation of the defendant.
*Kelly v. Robinson,* 479 U.S. 36, 52, 107 S.Ct. 353 (1986).
[T]hough the VWPA was intended to compensate the victim, it does so in a
manner distinct from the normal functioning of a civil adjudication. A
court imposing an order of restitution is required to consider the
defendant's ability to pay. 18 U.S.C. 3580(a). The victim may therefore
be awarded less than full compensation solely because of the offender's
financial circumstances. Furthermore, unlike a civil suit, the victim is
not a party to a sentencing hearing and therefore has only a limited
ability to influence the outcome. The victim cannot control the
presentation of evidence during either the criminal trial or the sentencing
hearing and is not even guaranteed the right to testify about the extent of
his losses. Neither can he appeal a determination he deems inadequate.
*United States v. Perry*, 360 F.3d 519, 529 (6th Cir. 2004)
By contrast,
the MVRA makes restitution *mandatory* for victims of certain offenses.
*See* 18 U.S.C. 3663A(a)(1). Thus, the victims of many crimes now
have a *right
to restitution*. Also unlike the VWPA, *district courts may no longer
consider a defendant's financial circumstances* when determining the amount
of restitution to be paid. *Id.* at 3664(f)(1)(A). The MVRA invites *victims
to participate in the sentencing process* through the United States
Probation Office.8 *Id.* at 3664(d)(2). These changes reflect a more
fundamental shift in the purpose of restitution, as explained in the MVRA's
legislative history. The new restitution scheme is not merely a means of
punishment and rehabilitation, but an attempt to provide those who suffer
the consequences of crime with some means of *recouping* the personal and
financial losses. h.r.rep. no. 10416, at 5 (1995).
*United States v. Perry*, 360 F.3d 519, 530 (6th Cir. 2004)
When asked to vacate an order which vacated the entire lien (as opposed to
the portion relating only to the responding party) of one of many victims,
which had been placed on the debtors real property, the Court in *United
States v. Perry*, 360 F.3d 519, 529 (6th Cir. 2004), discussed *Kelly* and
highlighted that *Kelly* was based on the Victim and Witness Protection Act
(VWPA) and, that, therefore, it was distinguishable. The Court stated that
the enactment of the Mandatory Victims Restitution Act (MVRA), 18 U.S.C. 3663A, in 1996, i.e., 10 years after *Kelly, *now gave the victim standing:
III.
*United States v. Perry*, 360 F.3d 519, 524 (6th Cir. 2004)
WE DO NOT ACCEPT SERVICE BY EMAIL UNLESS WE HAVE AGREED TO ACCEPT IT IN
WRITING.
Giovanni Orantes, Esq.*
Orantes Law Firm, P.C.
3435 Wilshire Blvd. Suite 2920
Los Angeles, CA 90010
Tel: (213) 389-4362
Fax: (877) 789-5776
e-mail: go@gobklaw.com
website: www.gobklaw.com
**Certified Bankruptcy Specialist, State Bar of California, Board of Legal
Specialization*
*Board Certified - Business Bankruptcy Law - American Board of Certification
*Board Certified - Consumer Bankruptcy Law - American Board of Certification
Commercial Litigation
Estate Planning
Outside General Counsel
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Brief summary of one case:Balance of restitution is close to $60,000.It involved a misdemeanor hit and run - debtor was driving an 18-wheeler and cla
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