RECENT DEVELOPMENTS IN BANKRUPTCY LAW

RECENT DEVELOPMENTS IN BANKRUPTCY LAW

AAugust 12, 2016 Today the Bankruptcy Appellate Panel ruled that a “pay to stay” jail fee is dischargeable in bankruptcy.  In this case, an individual filed for chapter 7 bankruptcy, and owed fees to Dakota County for room and board fees for time spent in jail.  After the bankruptcy was filed, Dakota County claimed that these fees should not be discharged in the bankruptcy because they were a fine or penalty owed to a government unit.  However, the Court concluded that this type of fee does not meet the standard to be nondischargeable as a fine or penalty, and the debt owed to Dakota County was discharged as part of the chapter 7 bankruptcy.  Dakota County v. Milan.ugust 12, 2016 Today the Bankruptcy Appellate Panel ruled that a “pay to stay” jail fee is dischargeable in bankruptcy.  In this case, an individual filed for chapter 7 bankruptcy, and owed fees to Dakota County for room and board fees for time spent in jail.  After the bankruptcy was filed, Dakota County claimed that these fees should not be discharged in the bankruptcy because they were a fine or penalty owed to a government unit.  However, the Court concluded that this type of fee does not meet the standard to be nondischargeable as a fine or penalty, and the debt owed to Dakota County was discharged as part of the chapter 7 bankruptcy.  Dakota County v. Milan.