Criminal Debt

We do not practice criminal law.  But we do practice debt law, which includes criminal debt, restitution, LFO’s, and fines.  These types of debts are generally non-dischargeable but can be amortized through bankruptcy, appealed, settled, litigated, and resolved via other techniques.  Call us today to see how we can help.

Criminal Debt Resolution

If you are dealing with debts related to violations of law, we may be able to help.  There are many ways of doing this ranging from settlement, to litigation, to bankruptcy, to out of the box techniques.  The most common ways of resolving criminal debts or debts owed to the government include:

  1. Bankruptcy
    • While debts owed for fines, LFO’s, and criminal restitution are generally non-dischargeable, bankruptcy can help in other ways
    • Chapter 7 can be used to discharge other debts to free up the cash flow to make payments or settle
    • Chapter 13 can be used to spread payments over time, be in good standing, keep from violating probation
    • Can be used to get your driver’s license back as soon as you file
    • Services offered: full bankruptcy representation in chapter 7 and chapter 13 proceedings, adversary proceedings, and defense against creditor actions.
  2. Litigation
    • We are not criminal law attorneys but can work in conjunction with criminal law practitioners
    • Appeals can be used for failure to consider your ability to pay and reduce or remove restitution
    • Appeal of the underlying conviction (which removes the judgment if you are successful)
    • Motions to reduce interest accrued to just pay back the principal amount
    • Consumer protection suits when collectors violate your rights or commit fraud
    • Services offered: we generally refer out appeals for failure to consider ability to pay, to appeal a conviction, or for reduction in interest.
  3. Settlement
    • By using leverage (avoidance, bankruptcy, litigation, etc.) we can help to settle outstanding restitution, LFO’s, and fines owed to the government
    • Services offered: full debt settlement services and litigation
  4. Other
    • Avoidance Strategy: If you can’t get rid of the judgment, we can review your situation to see if you are judgment proof or a very hard target to collect from
    • Expiration of Judgment: If the judgment was prior to July 1, 2000, your judgment may have expired (note post July 1, 2000 judgments are for life until paid in full)
    • Financial Strategy: Depending upon your situation, it might be possible to make low payments while using investments or higher yield products to get ahead of the debt and eventually settle or pay off
    • Services Offers: Strategy for out of court solutions

Relevant Laws and Bills

Statute of Limitations on LFO’s Generally

An offender ordered to pay LFOs under a superior court judgment for an offense committed on or after July 1, 2000, remains under the court’s jurisdiction until the obligation is completely satisfied, regardless of the statutory maximum for the offense. For crimes committed prior to July 1, 2000, the offender is under the court’s jurisdiction for purposes of enforcement of the obligation for 10 years following release from total confinement or 10 years after entry of the judgment and sentence, whichever is longer. Prior to the expiration of the initial 10-year period, the superior court may extend the judgment an additional 10 years for payment of the LFO.

Restitution obligations ordered as a result of a conviction in a court of limited jurisdiction may be extended beyond the initial 10-year enforcement period only if the court finds the offender has not made a good faith attempt to pay.

In Washington, restitution and LFO’s can expire for Pre July 2001 Debts

Judgments, even those for criminal debts, are good for 10 years and may be renewed within 90 days of the 10 years expiring.  If you were confined, the statute tolls until your total confinement ends.  See RCW 6.17.020(4)
(4) A party who obtains a judgment or order for restitution, crime victims’ assessment, or other court-ordered legal financial obligations pursuant to a criminal judgment and sentence, or the assignee or the current holder thereof, may execute, garnish, and/or have legal process issued upon the judgment or order any time within ten years subsequent to the entry of the judgment and sentence or ten years following the offender’s release from total confinement as provided in chapter 9.94A RCW. The clerk of superior court, or a party designated by the clerk, may seek extension under subsection (3) of this section for purposes of collection as allowed under RCW 36.18.190, provided that no filing fee shall be required. 
If the party attempts to collect a debt that is discharged, it could be a violation of consumer protection laws and may enable you to file counterclaims.  For juvenile restitution and LFO’s, see RCW 13.40.192.
Definitions under RCW 9.94a.030
          Court Ordered Restitution- Enforcement RCW 3.66.120
State authorization to use collection agencies RCW 36.18.190

Restitution and LFO’s for post July 2000 debts can have interest reduced

If a criminal offense occurred after July 1, 2000, restitution does not expire.  See RCW 9.94a.753 and State v Gossage.  However, there are still options.  First, you can file a motion to reduce the interest or you can attack the consideration of the ability to pay under State v Blazina.  Second, you can amortize payments under Chapter 13.  Third, you can try to settle or get into a payment plan.  Call us to see how we can help.

If the ability to pay was not considered, it may be a basis for appeal

The Washington State Supreme Court, in State v. Blazina, ruled that courts must consider a person’s ability to pay in establishing discretionary legal financial obligations (LFO’s).  If your ability to pay was not considered, you may be able to get the LFO’s removed or reduced.  It is important to note, the requirement the consider the ability to pay only applies to discretionary LFO’s.  Mandatory LFO’s (such as restitution, victim penalty assessment, DNA collection fees, etc.) are not subject to this type of review.

See WA State Supreme Court Guide for LFO’s

If the collection agency has included unauthorized amounts or applied payment to expired debt- we can sue

Consumer protection laws still apply regardless of the nature of the debt.  Collectors must use the correct principal amounts and interest calculations during the entire process.  If they do not or if they apply garnished amounts to debts beyond the statute of limitations, you may have a claim.

Interest on criminal debt can be removed or reduced

RCW 10.82.090 allows interest to removed or reduced upon motion.  Typically if it has been a long time and you have had no other criminal legal issues, this is possible.  There is a very nice fee waiver guide put out by Washington Law Help if you feel comfortable filing on your own or with pro bono assistance.  As a private firm, we do offer this service but have to charge.

Bankruptcy can be used to discharge (limited basis) or amortize criminal debt

Generally criminal debts and fines are not dischargeable as well as vehicular harms involving drugs or alcohol pursuant to 11 USC 523(a)(7)

(7)to the extent such debt is for a fine, penalty, or forfeiture payable to and for the benefit of a governmental unit, and is not compensation for actual pecuniary loss, other than a tax penalty—

(A) relating to a tax of a kind not specified in paragraph (1) of this subsection; or
(B) imposed with respect to a transaction or event that occurred before three years before the date of the filing of the petition;

What the above code section means is if the sum is a punishment (restitution for example) it is non-dischargeable.  If it is to compensate for sums spent by the government, then it is dischargeable.  For example, imagine you were speeding and the ticket amount is $1,000.00.  This is a punishment and non dischargeable.  But lets say that that you received an overpayment on unemployment and they want that overpayment amount back, that would be dischargeable as its not a punishment but compensation.

The decision on whether LFO’s are considered punitive or to compensate for pecuniary loss is up to each state.  Washington State has generally found all LFO’s are punitive and therefore non-dischargeable.  See Sanders v. Alliance One for a longer explanation.

This code section (11 USC 523(a)(7)) also interacts with Chapter 13 via 11 USC 1328(a)(3)-(4)

(3) for restitution, or a criminal fine, included in a sentence on the debtor’s conviction of a crime; or
(4) for restitution, or damages, awarded in a civil action against the debtor as a result of willful or malicious injury by the debtor that caused personal injury to an individual or the death of an individual.

Chapter 7 can also be used to discharge non-criminal debt to free up the cash flow to pay for non-dischargeable restitution.

Chapter 13 can also be used to prevent garnishment for debts and to afford you some measure of life style under the chapter 13 plan.  Even without discharge, this can be repeated as necessary.  When combined with the natural expiration of criminal judgments, it is possible to limit the harms a long term restitution garnishment can cause.

Criminal debts can be settled

Any debt can be settled.  Private parties tend to be more personally invested which makes settlement tricky.  Government collectors are impersonal but know they have a great deal of leverage and can threaten to pull your license.  In either case, call us to see how we can help.

Strategic consultation

Beyond the above, there are methods of structuring income, assets, type of profession, and other angles to create leverage for a good settlement or debt avoidance.  By combining structuring, leverage, and legal techniques, we can help determine the best method of resolving any criminal debts that you are dealing with.  These are typically 1-2 hour long in depth paid consultations.  You are welcome to start with a free initial phone consultation to see if this is what you need.  Call 206-535-2559 to schedule a free initial phone consultation or in depth in person paid consultation.

Specific Issue- Shoplifting & Civil Penalties under RCW 4.24.230

If you were accused of shoplifting or did shoplift, you may or may not be criminally prosecuted.  A growing trend, however, is to use the civil penalty provision of RCW 4.24.230 to send you a civil demand letter demanding a certain amount of money or they will sue you.  Even if police were not called, they can do this and criminal prosecution is separate and different from a suit for civil damages.  Under the statute you can be sued for:

If you are above 18 or an emancipated minor: for the retail value of the item (not to exceed $2,850.00) AND a civil penalty of $100.00 to no more than $650.00

If you are a parent or guardian of an unemancipated minor: for the retail value of the item (not to exceed $1,425.00) AND a civil penalty of $100.00 to no more than $650.00

So basically, the creditor always demands the maximum civil penalty of $650 as well as the retail value.  So if you went to steal a shirt that retails for $19.99, they will likely ask for $669.99.  Luckily, they can’t charge taxes so you get a break there.  Payment of this amount along with the signature of the other side should act as a compromise.  See RCW 10.22.

Several law firms send these sorts of civil demands.  The usual culprits we see are Michael Ira Asen and Palmer Recovery,  however there are many more.

The question most people ask is whether to pay or ignore the letter.  It really is about risk tolerance and the amount in controversy.  Your choice generally boils down to do you pay a smaller amount to make sure it is handled or do you take a chance of a zero or something larger?  

  1. If you pay, their civil claim is settled.  Usually this is a around $500.00 to $650.00.  You would not pay attorney fees on top of this or the retail amount.  It does not stop criminal prosecution but under RCW 10.22.020, the court may stop the proceedings if the defendant submits in writing the compromise.
  2. If you do not pay, there is a chance they will not pursue you but there is also a chance they will.  Obviously, if you are not pursued, then you pay $0.00.  If they do sue you they will ask for the full retail value and the full civil penalty and attorney fees.  So in the $19.99 shirt example, it would be $19.99 + $650.00 + attorney fees/costs (usually around $500.00 to $750.00) for a total of around $2,000.00.

TIP: paying the civil demand does not stop criminal prosecution UNLESS it is in writing from the (alleged) victim and even then it is in the court’s discretion.

There are potential defenses against this sort of claim.  As we are debt attorneys who do not practice in criminal court, if you have been criminally charged you will want to talk to a criminal attorney.  If, however, you are just dealing with a civil demand we can assist in discussing your options.