Having Financial Problems? Find Information About Bankruptcy Here

According to the experts, it costs approximately $31,000 per year to house a prison inmate. To recover some or all of that money, some states have begun charging inmates for their room and board. Unfortunately, this often leads to many people leaving jails and prisons burdened with debt that makes near impossible to successfully reintegrate into society. Luckily, incarceration debt can be successfully discharged in bankruptcy. Here's what you need to know.

The Debt Cannot Be Assessed as a Fine or Penalty

Generally, fines and fees assessed by the court cannot be discharged in bankruptcy because these financial obligations are typically part of the defendant's punishment for the crimes they committed. For instance, DUI fines are levied on drunk drivers to punish them for driving while intoxicated and cannot be discharged because they are part of the defendant's sentence.

However, incarceration fees are neither fines nor penalties. Rather, they are a reimbursement of monies spent housing, feeding, and providing medical care for prisoners. Because these fees are pecuniary in nature, they can be discharged in a bankruptcy case.

It's important to research the laws in your state, though, as well as to read your sentencing report. Your attempt to get incarceration fees discharged may be thwarted by the language in the law regulating them. If the law indicates incarceration fees should be considered part of the inmate's punishment, the fees will be non-dischargeable. Likewise, if the judge or jury decides you should pay your room and board in jail as part of your sentencing, you may be stuck with the debt until it's paid in full.

Other Options for Dealing with Incarceration Debt

It's not the end of the world if your incarceration debt can't be eliminated through bankruptcy. You do have options for dealing with this issue, and the best one for you will depend on your circumstances and finances.

One option is to file for chapter 13 bankruptcy. Dubbed the wage-earner plan, this type of bankruptcy lets you make payments on the debt over a period of 3 to 5 years. Since the automatic stay will be in effect during the entire time your case is active, this can prevent the state from engaging in harmful collection action to acquire the money owed, such as taking your inheritance or tax refunds.

In some cases, any remaining balance left on the debt when your chapter 13 bankruptcy ends may be discharged, meaning you won't have to continue paying on the debt once the case closes. Again, though, this may depend on how the law defines incarceration debt, so you should consult with a bankruptcy attorney for help determining whether your debt will be eligible.

The other option is to follow through with filing a chapter 7 bankruptcy and eliminating as much of your other debt as possible, which will free up money you can use to pay your incarceration bill. For instance, credit card balances and installment loans are dischargeable in bankruptcy. Thus, the payments you were making on these debts can be used to pay off the bill the state sends you for the time you spent in jail or prison.

Lastly, you can file a chapter 20 (i.e. chapter 7 followed by a chapter 13). This is a good option for dealing with a large bill (e.g. tens of thousands of dollars). You'll eliminate excess debt through the chapter 7 and get extra time to pay the bill without being hounded by the state via the chapter 13.

There may be other ways to deal with this particular debt. It's best to consult with a bankruptcy attorney or law firm, such as Phoenix Law, for advice on your options.