Question: I have to pay restitution for a criminal matter and I can't pay it back. All the money is gone. I need to know if there is any way to use a bankruptcy filing to get out from having to make restitution because I can't afford to make the payments.
Basically I got caught up in some white-collar crime. It had to do with insider trading. I had some early information about my company's earnings and I tipped off a friend that I play golf with. He used that information and made a good profit. Actually, he made a lot of money. I didn't know that he would use the information that I told him for personal gain.
One thing led to another and I was arrested and I had to plead guilty in federal court to insider trading. I didn't want to go through a trial and I didn't want to have to pay an attorney to defend me. So I pled guilty.
As part of the sentence I have to pay back some money. The problem is that I don't have the kind of money that the court wants. My new job pays far less than I was making at the company before I got fired.
I've got many debts I can't pay, like credit cards, loans and a mortgage on my vacation home.
Can I use a chapter 7 bankruptcy to eliminate the insider trading debt?
N.A. in Dunwoody
Answer: Court-ordered restitution stemming from a criminal conviction cannot be discharged in a chapter 7 bankruptcy. Just about all other debts can be discharged, but a debt of court-ordered restitution is not one of them.
However, the debt can be included in a chapter 13 bankruptcy plan. By including it in a chapter 13, you can pay the debt in a more affordable and convenient manner over a period of years. A chapter 13 can really help someone afford to pay restitution.
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