Restitution Dischargeable in Bankruptcy Case

Under the bankruptcy code, a fine, penalty, or forfeiture payable to and for the benefit of a governmental unit, is generally non-dischargeable. In other words, while you can generally get rid of just about all debt in a bankruptcy case, you cannot get rid of a fine, penalty, or forfeiture. Criminal restitution is generally considered to be a  fine, penalty, or forfeiture. However, Judge J. Frederick Motz of the United States District Court in Baltimore recently determined, in the case of Cregger v. Maryland, that restitution, owed by a parent, as a result of criminal activity of their child, was dischargeable.

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