The general rule is that court fines cannot be discharged in a Chapter 7 bankruptcy if they are owed to a governmental unit, are for the benefit of that unit, and are punitive rather than compensatory.The term “government unit” usually refers to a court or municipality, but has also been held to include other government units such as a federal credit union.Second, the fine has to be for the benefit of the government unit, not a party to a case. So if you owe your fine to a person, say a victim of a crime you committed, then the fine isn’t for the benefit of the court and so is dischargeable.Third, if the fine was levied against you as a punishment, it isn’t dischargeable, but if it was compensatory, then it is dischargeable. In practice, this means that parking tickets, speeding tickets and criminal fines can’t be discharged because they are meant to be a punishment. Likewise, fines and penalties resulting from a DUI can never be discharged. However, if you owe a fine to compensate someone for pecuniary loss that you caused that debt is dischargeable.
These blog posts are for general informational purposes only and do not constitute legal advice. Laws may have changed since the date of publication.
