The criminal justice system bills defendants for the distribution of justice. Defendants are subject to legal financial obligations at all stages of their case that can metastasize into unpayable debts. These financial obligations uniquely impact indigent defendants, who may be incentivized to minimize costs instead of minimizing their chances of conviction. If convicted, indigent defendants may face debts that restrict their civil rights indefinitely.<\/p>\n
Restitution\u2014which requires an offender to compensate the victim\u2014contributes to the offender\u2019s overall legal financial debt. It is exceedingly difficult to absolve a restitution obligation if an offender lacks the money to pay it off. Bankruptcy, which allows for the legal \u201cdischarge\u201d of civil debts, is generally unavailable for criminal debts owed to the government. A decades-old Supreme Court case, Kelly v. Robinson<\/em>, held that restitution falls under the non-dischargeable category in Chapter 7 bankruptcy. The Court found that despite the fact that restitution looks like a civil debt, it is a penal sanction for the benefit of the state. However, the Ninth Circuit recently questioned Kelly<\/em> in Albert-Sheridan v. State Bar of California<\/em> (In re Albert-Sheridan<\/em>), finding Kelly<\/em>\u2019s analysis questionable and deciding to \u201ccabin Kelly<\/em>\u2019s reach\u201d from discovery sanctions levied against a lawyer for misconduct. Considering current scholarship and Albert-Sheridan\u2019s distaste for Kelly<\/em>, this Note offers a new critique of Kelly<\/em>. First, this Note argues that while restitution is a \u201cpunitive\u201d measure, that fact alone should not make it non-dischargeable under the text of the bankruptcy code. Second, this Note argues that Kelly<\/em> exposes an arbitrary distinction between criminal law and civil law and that Kelly<\/em>\u2019s goals of punishment and rehabilitation could be better achieved through debt forgiveness.<\/p>\n Part I explains the problem of criminal debt, analyzes the goals and effects of restitution, and surveys the legal landscape that prevents bankruptcy from discharging restitution payments. Part II argues\u2014contrary to Kelly<\/em>\u2014that although restitution is punitive in nature, it is ultimately not for the benefit of the state. Finally, Part III argues that Kelly<\/em>\u2019s holding is normatively undesirable because it is a product of an arbitrary distinction between the criminal and civil law, and because debt forgiveness has greater utilitarian and moral value.<\/p>\n