Restitution

• Restitution involves funds that a convicted person is required to pay for his crime as part of his punishment. Usually, the funds provide some partial reimbursement to the victim of the crime or those related to the victim if the victim is dead. This punishment helps somewhat pay for costs incurred as a result of the crime (medical bills, funeral costs, property damage, travel to hearings).
  
  

Parties Allowed to Ask for Restitution

• The victim or the victim's family can request restitution from the court. This is not limited to blood relatives. It can include significant others, spouses, children and even employers. Those affected and seeking restitution need to petition for it as soon as possible when criminal court proceedings begin. It's not a filing that can be addressed after the fact once a conviction has been determined and sentenced.
  
  Restitution is limited in nature; it can't be equaled to a punitive value. The money amount needs to be equal to the direct costs incurred as a result of the crime and convict's actions.
  
  

Bankruptcy Impact

• Bankruptcy is when a person files to have a court either reorganize his finances (Chapter 13) or discharge debts entirely (Chapter 7). While a Chapter 7 filings can dissolve debts owed by a party, when it comes to restitution ordered by the federal government, bankruptcy has no discharge impact. All court fees, penalties, fines and money awards remain in place, even if bankruptcy is approved for all debts of a party. This is specified in federal statute Title 11 USC Section 523 (a) (7).
  
  

Collection Treatment

• Regardless of bankruptcy filings, restitution charges will still be collected as they were before bankruptcy was filed. So assets seized and paychecks garnished will continue without interruption. Further, if assets are liquidated by the court for the purpose of debt reorganization, and funds are left over, restitution orders can grab such available funds first before they are distributed to the debtor who has filed in court.
  
  

Penalties for Non-Payment

• If a party is on parole, assumes bankruptcy has resolved his restitution and then refuses to pay, failure to follow through can revoke his parole status. This then would allow the person to be arrested and placed back in prison immediately. For those who have already been released but still owe restitution and fail to pay, for federal restitution the Federal Litigation Unit will continue collection on any funds, tax refunds and income identified.