People who have been through a criminal case and a financial collapse in the same stretch of years often assume bankruptcy will clear everything, including what the court ordered them to pay. It will not. Criminal fines and restitution survive a bankruptcy discharge, while most of the debt sitting next to them on the same credit report does not. The Rossback Firm handles both criminal defense and bankruptcy from downtown Aberdeen, and the overlap between the two is where a lot of people get a nasty surprise.
Does bankruptcy erase criminal fines and restitution?
No. Under 11 U.S.C. section 523(a)(7), a debt for a fine, penalty, or forfeiture payable to and for the benefit of a governmental unit is excepted from discharge when it is not compensation for actual pecuniary loss. Criminal fines fall squarely inside that language.
Restitution is treated the same way. The United States Supreme Court held in Kelly v. Robinson that restitution ordered as part of a state criminal sentence is not dischargeable in Chapter 7, even though the money ultimately reaches a victim rather than the state. Courts reason that restitution serves the penal purposes of the sentence rather than functioning as an ordinary debt.
The practical result in Washington is that the restitution, crime victim penalty assessment, and fines listed in a judgment and sentence follow you through a bankruptcy case and come out the other side intact.
Is Chapter 13 any different?
Partly, and the distinction is worth understanding. Chapter 13 gives a somewhat broader discharge than Chapter 7, but 11 U.S.C. section 1328(a)(3) specifically excepts restitution and criminal fines included in a sentence on conviction of a crime. Those obligations survive both chapters.
Where Chapter 13 can help is with government debt that is not criminal. Parking tickets, traffic infractions, and certain civil penalties are nondischargeable in Chapter 7 under section 523(a)(7), but that exception is not carried into the Chapter 13 discharge in the same way, which is why some non-criminal fines can be eliminated at the end of a completed plan.
Chapter 13 also offers a structural advantage even when the debt survives. A three to five year plan can pay nondischargeable obligations like restitution steadily while credit cards and medical bills are wiped out, which frees the income needed to make those payments in the first place. For someone facing both a payment plan at the courthouse and aggressive collection on consumer debt, that combination is often the entire point of filing.
Which debts does a discharge actually wipe out?
Most of what people owe. A Chapter 7 discharge eliminates credit card balances, medical bills, personal loans, payday loans, old utility accounts, deficiency balances after a repossession, and the large majority of civil judgments.
Income tax debt can go as well when it meets the timing requirements, though recent taxes generally survive. Child support and spousal maintenance never do. Most student loans remain absent, showing undue hardship.
The mix matters more than the total. Someone carrying $6,000 in restitution and $40,000 in credit card and medical debt is in a very different position than someone whose balance sheet is mostly court debt. Bankruptcy solves the first situation well and the second one hardly at all.
What about a civil lawsuit arising from the same incident?
That depends on what the conduct was. A civil judgment is ordinarily dischargeable, but two exceptions come up constantly in cases that started as criminal matters.
Section 523(a)(6) excepts debts for willful and malicious injury to another person or their property. An assault case that produces both a conviction and a civil judgment usually leaves that judgment in place after a Chapter 7 discharge.
Section 523(a)(9) is narrower and absolute. Debts for death or personal injury caused by operating a motor vehicle, vessel, or aircraft while intoxicated are nondischargeable, and that exception applies in Chapter 13 as well. A DUI collision that injured someone produces civil liability that bankruptcy cannot touch, regardless of chapter.
Property damage caused by willful conduct occupies a middle ground, and it is one of the places where Chapter 13 reaches further than Chapter 7.
Does filing bankruptcy stop collection on court debt?
Not in the way it stops other collections. The automatic stay under 11 U.S.C. section 362 halts garnishments, repossessions, and creditor calls the moment a case is filed. Subsection (b)(1) carves out the continuation of criminal proceedings against the debtor.
Filing does not pause a probation review, a show cause hearing over missed LFO payments, or an active criminal case. Anyone who stops making court-ordered payments because a bankruptcy is pending is inviting a problem at the courthouse that the bankruptcy court will not fix.
There is one protection worth knowing. Section 525 prevents a governmental unit from denying or revoking a license solely because a debt was discharged in bankruptcy, which occasionally matters when licensing consequences are tied to unpaid obligations that the discharge did cover.
What relief does Washington law itself provide?
More than it did a decade ago. The Legislature has reworked legal financial obligations repeatedly, and much of the relief bankruptcy cannot give is available directly from the sentencing court.
Interest is the biggest change. Legislation in 2018 eliminated interest on non-restitution LFOs and ended the practice of jailing people solely for inability to pay. Restitution still accrues interest at the rate applicable to civil judgments, which has sat at 12 percent for years, but a 2022 law gave judges discretion to waive or reduce that interest after consulting the victim, and allowed courts to decline ordering restitution where the payment would go to an insurer rather than an individual.
That same 2022 legislation set a ten year enforcement period after release for non-restitution obligations and allowed a defendant to petition at any time for remission of fines based on manifest hardship. A 2023 law eliminated the DNA collection fee entirely and exempted indigent defendants from the crime victim penalty assessment, which had been mandatory at $500 for a felony and $250 for a gross misdemeanor. People already carrying those amounts can petition to have them removed.
Indigency for these purposes generally means receiving qualifying public assistance or income at or below 125 percent of the federal poverty level. Under RCW 9.94A.760, a court may not impose discretionary costs on a defendant found indigent at sentencing, though indigency alone does not eliminate restitution.
Why The Rossback Firm looks at both sides
The right move frequently sits on the other side of the line from where the client is looking. Someone sinking under court debt may need a motion for remission or a request to waive restitution interest rather than a bankruptcy petition. Someone else may need a Chapter 7 to clear $50,000 in consumer debt so the $4,000 in restitution finally becomes payable on a monthly schedule the court will accept.
Handling both practice areas means the analysis starts with the actual judgment and sentence rather than a credit report alone. The breakdown of restitution, fines, assessments, and costs determines which parts a discharge reaches, which parts a Washington court can reduce, and which parts have to be paid no matter what.
Bankruptcy is a strong tool against consumer debt and a poor one against a criminal judgment. Restitution and criminal fines survive both Chapter 7 and Chapter 13, while credit cards, medical bills, and most civil judgments do not, and Washington’s own LFO statutes now supply relief that federal bankruptcy law cannot. Sorting out which path applies requires looking at the sentencing paperwork and the debt together. The Rossback Firm works with clients across Grays Harbor County who are carrying both, and can tell you which obligations will still be there when the case closes. If court debt and consumer debt are piling up at the same time, a consultation that covers both is the practical place to start.