Are Expenses Related to My Minor Children’s Incarceration Dischargeable in Bankruptcy?

By Ryan C. Wood

If you have a minor child who is currently or was previously incarcerated you already know that you are responsible for the expenses related to their support while they are incarcerated. But did you also know that those expenses related to the incarceration are not dischargeable in bankruptcy?

This is exactly what the Ninth Circuit Bankruptcy Appellate Panel decided in Rivera v. Orange County Probation Department (In re: Rivera), 13-1476 (BAP, 9th Cir., June 4, 2014). In this case, Maria Rivera’s son was incarcerated in Orange County for close to 2 years from 2008 to 2010. In accordance with Cal. Welf. & Inst. Code §903, the parents of the minor are liable for the reasonable costs of support while the minor is incarcerated. The costs of support are only for the actual costs incurred by the county for food and food preparation, clothing, personal supplies, and medical expenses, not the total cost of the incarceration. Additionally, the costs of support can not exceed $30 per day and the county will be reimbursed for the costs of legal representation. Additionally, the liability is only imposed on people that have the ability to pay. Orange County indicated that the total cost of incarceration for Ms. Rivera’s son was $420 per day. Orange County only tried to collect $23.90 a day from Ms. Rivera. The county represented this was for the “food and food preparation, clothing personal supplies and medical expenses” while he was incarcerated. In addition to the $23.90 per day, the County wanted $2,199 from Ms. Rivera for her son’s legal representation while he was incarcerated. The County sent Ms. Rivera multiple bills as well as court orders that require her to meet with a financial officer to determine her ability to repay the expenses but Ms. Rivera did not respond to any of the communications. She paid approximately half of the amount due to Orange County in May 2010 ($9,508.60). The remaining balance was $9,905.40. Ms. Rivera’s bankruptcy attorneys helped her file for Chapter 7 bankruptcy protection on September 12, 2011. Orange County was listed in Schedule E as a priority unsecured creditor. The Chapter 7 trustee determined it was a no asset case and Ms. Rivera received a discharge of her debt in January 2012. After the case was closed Ms. Rivera continued to receive collection notices from the County and Ms. Rivera’s bankruptcy attorney reopened her case to file a motion for an order directing Orange County to show cause why they shouldn’t be held in contempt for a violation of the discharge order. The judge decided that the debt owed to Orange County was excepted from discharge under §523(a)(5) and therefore the County did not violate the discharge order. Ms. Rivera appealed to the Bankruptcy Appellate Panel (BAP).

The judges in the BAP compared the exception to discharge before and after the BAPCPA amendments to the Bankruptcy Code. BAPCPA is the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 or nicknamed by some bankruptcy lawyers, BARF, for “Bankruptcy Abuse Reform Fiasco.” Prior to BAPCPA, 523(a)(5) provided that debts owed to “a spouse, former spouse, or child of the debtor, for alimony to, maintenance for, or support of such a spouse or child” is not dischargeable in bankruptcy. Under this rule, Orange County would not be included in this exception since Orange County was not a “spouse, former spouse, or child” and therefore their debt would have been discharged along with the rest of Ms. Rivera’s debt. However, since BAPCPA was enacted, §523(a)(5) only states that the debts for a domestic support obligation are not dischargeable. §101(14A) defines “domestic support obligation” to mean debts “(A) owed to or recoverable by (i) a spouse, former spouse, or child of the debtor or such child’s parent, legal guardian, or responsible relative; or (ii) a government unit; (B) in the nature of alimony, maintenance, or support (including assistance provided by a government unit) of such spouse, former spouse, or child of the debtor or such child’s parent…” The new amendments definitely include Orange County since they are a government unit that provided support to the child. The judges held that since the debt was accrued before the bankruptcy petition was filed and owed to a government unit, incurred for the support of the child, was determined by a court order before Ms. Rivera filed for bankruptcy and the debt was not assigned to a nongovernmental entity for collection, the debt was nondischargeable.

If you owe money for the expenses related to a government agency due to the support for the incarceration of your minor child, it is best that you seek the advice of an experienced bankruptcy lawyer in your jurisdiction for advice on how to proceed.