Bankruptcy does not clear criminal restitution. Whether the order came from a federal or state criminal court, and whether you file under Chapter 7 or Chapter 13, the full balance survives your case and remains legally owed. The Bankruptcy Code carves restitution out of the discharge, the automatic stay does not stop the criminal court from enforcing it, and the government keeps powerful collection tools for years after your bankruptcy closes.
Why Restitution Survives Every Chapter
Two provisions of the Bankruptcy Code lock restitution out of discharge. Section 523(a)(13) directly excepts “any payment of an order of restitution issued under title 18,” which covers federal criminal restitution.1Office of the Law Revision Counsel. 11 U.S.C. 523 – Exceptions to Discharge
State restitution reaches the same result through Section 523(a)(7). In Kelly v. Robinson, the Supreme Court held that a state criminal court’s restitution order counts as a “fine, penalty, or forfeiture payable to and for the benefit of a governmental unit,” because it serves the state’s punishment and rehabilitation goals and the victim does not control the amount. That makes it nondischargeable regardless of who ultimately receives the money.2Justia U.S. Supreme Court Center. Kelly v Robinson
Chapter 13 used to be different. Before the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, its broader discharge sometimes reached debts that Chapter 7 couldn’t. That gap is closed. Section 1328(a)(3) now expressly excepts from Chapter 13 discharge any debt “for restitution, or a criminal fine, included in a sentence on the debtor’s conviction of a crime.”3Office of the Law Revision Counsel. 11 U.S.C. 1328 – Discharge There is no chapter of bankruptcy in which restitution disappears.
Filing Bankruptcy Does Not Stop the Criminal Court
The automatic stay that halts most collection activity when you file a bankruptcy petition has a specific carve-out for criminal cases. Section 362(b)(1) says the filing “does not operate as a stay of the commencement or continuation of a criminal action or proceeding against the debtor.”4Office of the Law Revision Counsel. 11 U.S.C. 362 – Automatic Stay
In plain terms: your credit card issuer has to stop calling, but the criminal court can keep enforcing its restitution order on the same schedule as before. Payment obligations, probation conditions, and enforcement hearings all continue.
How Chapter 13 Plans Handle Restitution
Chapter 13 lets you keep property and pay creditors through a three- to five-year plan.5United States Courts. Chapter 13 – Bankruptcy Basics Restitution is not on the list of “priority debts” under Section 507 that a plan must pay in full to be confirmed.6Office of the Law Revision Counsel. 11 U.S.C. 1322 – Contents of Plan Your plan may pay some, all, or none of it during those years.
What the plan does not do is erase the rest. Whatever restitution remains unpaid when the plan ends is not discharged, and the criminal court’s collection authority picks up where the plan left off. A confirmed Chapter 13 plan can also work against you in another way: the disposable income you disclose to fund the plan can undercut a later argument that you cannot afford your restitution payments.
How the Government Collects After Bankruptcy
Federal restitution creates a lien on all your property and property rights, enforced the same way as a federal tax lien. The government can file notice of the lien and pursue the same civil remedies available for any federal judgment.7Office of the Law Revision Counsel. 18 U.S.C. 3613 – Civil Remedies for Satisfaction of an Unpaid Fine
Wage garnishment is on the table, subject to the Consumer Credit Protection Act cap of 25% of disposable earnings.7Office of the Law Revision Counsel. 18 U.S.C. 3613 – Civil Remedies for Satisfaction of an Unpaid Fine State enforcement varies but typically includes garnishment, bank levies, and interception of tax refunds.
The window is long. Federal restitution can be collected for 20 years from the entry of judgment, or 20 years after release from prison, whichever is later, and the lien lasts as long as that collection right does.7Office of the Law Revision Counsel. 18 U.S.C. 3613 – Civil Remedies for Satisfaction of an Unpaid Fine For someone who serves a long sentence, that clock can run for decades after release.
Death does not close the account. Criminal fines terminate when the person dies, but restitution passes to the estate and the government’s lien continues against estate assets until the estate receives a written release of liability.7Office of the Law Revision Counsel. 18 U.S.C. 3613 – Civil Remedies for Satisfaction of an Unpaid Fine State collection timelines differ but can be similarly long.
What Happens if You Fall Behind
Missing restitution payments is not only a financial problem. If you are on probation and the court finds that your failure to pay was willful, meaning you had the ability to pay and chose not to, the court can revoke probation and impose incarceration. Before doing that, the court has to look at why you have not paid. Genuine inability to pay, such as job loss or medical hardship, is treated differently from a refusal to try.
Filing bankruptcy does not shift any of this to the bankruptcy court. The criminal court keeps full authority over your restitution during and after your case.
Restitution vs. Civil Judgments From the Same Conduct
People sometimes confuse restitution with a civil judgment a victim wins in a separate lawsuit. They are treated differently in bankruptcy, and the difference matters.
Criminal restitution is ordered by the criminal court as part of the sentence and is nondischargeable in every chapter under Sections 523(a)(7) and 523(a)(13).1Office of the Law Revision Counsel. 11 U.S.C. 523 – Exceptions to Discharge Criminal fines payable to the government are also nondischargeable under Section 523(a)(7).8United States Courts. Discharge in Bankruptcy – Bankruptcy Basics
A civil judgment is a separate question. A judgment for “willful and malicious injury” is nondischargeable under Section 523(a)(6); a judgment based on ordinary negligence may be dischargeable. The bankruptcy court decides that separately from the criminal court’s restitution order.1Office of the Law Revision Counsel. 11 U.S.C. 523 – Exceptions to Discharge
Take an assault conviction with a $10,000 restitution order and a separate $50,000 civil verdict for pain and suffering. The $10,000 is untouchable in bankruptcy. The $50,000 likely is too, because assault typically qualifies as willful and malicious, but the bankruptcy court has to make that finding on its own.
If restitution is the debt driving you toward bankruptcy, bankruptcy is not the answer to it. Filing may still make sense to clear other debts and free up income for the restitution schedule, but the restitution itself will be waiting on the other side.