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11 U.S.C. 525 provides (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.
In Practice
"Governmental Unit" includes federal, state, county, city, and taxing districts. Any fine imposed under color
of law will not be discharged as a matter of public policy. In addition, courts often reciprocate reporting
appearance dates for individuals who are subject to arrest for non-payment of fines.
The operation of law pertaining to federal debt relief is complex. State law statutes, federal rules, and
decisions rendered by courts combine to establish a local standard for Ohio Bankruptcy Courts. Anyone who
considers filing should, at a minimum, balance short term requirements to long term benefits. Each debtor is
different. The most valuable benefits are a personal choice, with availability dependent upon the application of
law to unique circumstances.
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