Bankruptcy “reform” a decade ago expanded protections for those owed family support.
Any debt “in the nature of support” can’t be discharged in bankruptcy, regardless of to whom it’s owed.
Orange County tried to ride that change in the law to make its claim against the mother of a kid in juvie survive her bankruptcy.
Last week, the 9th Circuit shot the county down, ruling that the bill for room and board for an incarcerated minor was not “domestic support”. A bankruptcy discharge wiped out the parent’s debt to the county.
Even more heartening than the result, which kept the county from visiting the “sins” of the children on the parent, was the language of the opinion.
the County’s actions compromise the goals of juvenile correction and the best interests of the child, and, ironically, impair the ability of his mother to provide him with future support. Burdening a minor’s mother with debts to be paid following his detention – debts that she cannot escape even in bankruptcy – hardly serves the future welfare of the child and hardly enhances the Probation Department’s attempt to transform him into a productive member of society. Most disturbing, however, is that the County’s actions undermine the very domestic “support” for which it is ostensibly seeking reimbursement. In relentlessly pursuing the debt’s collection and opposing its discharge, the County raises yet another obstacle to Rivera’s efforts to provide her son with the support about which the County claims to be so deeply concerned. That “betray[s] a misguided sense of values.”
How the case got to court
Ms. Rivera’s son was held in juvenile hall for more than a year. State law permits the county to charge the parents of a jailed minor for his room, board, clothing and legal expenses.
Orange County Probation Department billed Ms. Rivera over $16,000 for some part of the costs of his support in jail. She paid over half of the amount by selling her home.
She later filed bankruptcy and received a discharge. But by federal law, a bankruptcy discharge doesn’t discharge debts for family support, labeled “domestic support obligations” by BAPCPA.
The County asserted its claim against the mother survived her bankruptcy, got a judgment against her for the balance, and sought to collect.
She went back to bankruptcy court and sought to enforce the protection of her discharge against the County’s collection action.
She lost in the bankruptcy court and the Bankruptcy Appellate Panel, each of whom sided with the County that her debt was a non dischargeable domestic support obligation.
Jail isn’t home
On further appeal, the 9th Circuit didn’t buy the County’s argument that its debt for housing a juvenile was the sort of support that the Bankruptcy Code sought to protect from discharge.
The debt was incurred in furtherance of public safety, not the child’s safety and nurture. The County’s expense to house and feed the juvenile was incidental to its enforcement of the criminal law.
The court closed with an admonition to the County:
We would hope that in the future the County will exercise its discretion in a way that protects the best interests of minors and the society they will join as adults, instead of following a directly opposite and harmful course.
What happens next
Having lost the battle to establish that its debt survived the bankruptcy, Orange County Probation Department can expect a bill of its own payable to Ms. Rivera for sanctions for violating the discharge.
Apart from the bankruptcy law issue here, one comment in the opinion struck a chord with other news: the Orange County Probation Department gets 40% of its budget from bills like the ones it sent Ms. Rivera. Think back on the Ferguson MO budget funded by criminal fines. Or the poor jailed because they couldn’t pay fines.
No one threatened Ms. Rivera with jail, as far as we know, but her bout with the County was nonetheless debilitating.
Image courtesy of Roy Blumenthal under a Creative Commons license.