Court Will Hear Pennsylvania Victims’ Rights Case
WASHINGTON (AP) _ The Supreme Court said today it will consider placing new limits on the ability of convicted criminals to avoid making restitution to their victims by declaring bankruptcy.
The court agreed to hear an appeal by Pennsylvania officials seeking to recover $4,145 from a couple who pleaded guilty to welfare fraud.
The 3rd U.S. Circuit Court of Appeals ruled against Pennsylvania welfare officials last March in the case of Edward and Debora Davenport of Bucks County.
The Davenports pleaded guilty in 1985 to welfare fraud. Each was sentenced to one year probation and ordered to make monthly restitution payments of $208 until $4,145 was collected.
The Davenports sought protection in 1987 under Chapter 13 of the federal bankruptcy code.
As amended by Congress in 1978, Chapter 13 is designed to give debtors various court-supervised options to repay part of what they owe and eventually be rid of their debts.
A federal bankruptcy judge ruled in 1988 that the couple fulfilled its Chapter 13 obligations without making the restitution payments to the state.
The 3rd Circuit court upheld the judge’s decision. The appeals court said excusing the Davenports from the restitution payments is in line with the 1978 amendments Congress made to the bankruptcy code.
Otherwise, the appeals court said, ″restitution conceivably could deplete all the debtor’s resources before any distribution is made to the other creditors.″
The appeals court ruling seems to conflict with a 1986 Supreme Court ruling that barred criminals from using another part of the bankruptcy code, Chapter 7, to avoid restitution.
Unlike the Chapter 13 provisions, people who declare bankruptcy under Chapter 7 must liquidate their assets. The proceeds then are divided among creditors.
The appeals court said the 1986 Supreme Court ruling is limited to Chapter 7.
The appeals court said Chapter 7, unlike Chapter 13, specifies that ″a fine, penalty or forfeiture payable to and for the benefit of a governmental unit″ is not considered a debt for purposes of bankruptcy.
If Chapter 13 improperly creates ″a haven for criminals,″ it is up to Congress, not the courts, to correct the problem, the appeals court said.
″Where Congress has enacted legislation which arguably affects state criminal proceedings, it is not the function of this court to cure any perceived defects in that legislation,″ the appeals court said.
In the appeal acted on today, Pennsylvania officials noted that restitution payments are an option to be considered by sentencing judges in all states, and are required in many states.
The case is Pennsylvania vs. Davenport, 89-156.