No Discharge in Bankruptcy of Restitution Ordered in State Criminal Case

In re Troff, 2007 WL 766277 (3/15/07) - Restitution ordered as part of a state court criminal judgment cannot be discharged in bankruptcy. Congress has already precluded discharge for federal restitution. The 10th followed the S.Ct.'s decision in Kelly v. Robinson, 479 U.S. 36 (1986), that went beyond the plain language of the statute, which precludes discharge only for a "fine, penalty, or forfeiture for the benefit of a governmental unit" and decided restitution was "for the benefit of the government." The 10th rejected the debtor's distinction from Kelly that in this case the restitution was transferred to the victim, who was not a governmental unit. The federalism concerns of Kelly still ruled the day. In his concurrence, Judge Tymkovich expresses dismay that the 10th had to follow a S.Ct. case that took into account policy concerns that broadened the plain language. He suggested the S.Ct. should grant cert in the case.