Understand the complexities and nuances of the Bankruptcy Code to better advise clients and prepare for court.
By Daniel Gill
The federal government’s collection of criminal restitution under the Mandatory Victims Restitution Act didn’t violate the automatic stay created by a bankruptcy filing, the Ninth Circuit ruled ( Partida v. DOJ (In re Partida) , 2017 BL 234471, 9th Cir., No. 15-60045, 7/7/17 ).
The Ninth Circuit joined the only two circuits having previously considered the question of whether actions under the restitution law are barred by the automatic stay.
The opinion by Circuit Judge Mary M. Schroeder relied on language in the law stating that the government has broad powers to enforce a civil judgment “notwithstanding any other federal law.”
Deborah Lynn Partida pleaded guilty in 2002 to embezzlement of labor union assets and served 18 months in prison. She also agreed to a judgment for criminal restitution.
Failing to pay, she filed a Chapter 13 bankruptcy case on March 5, 2013. She owed about $218,000 of restitution.
Filing a bankruptcy case invokes an “automatic stay” from collection efforts against the debtor or property of the bankruptcy estate, pursuant to 11 U.S.C. §362(a).
Despite the automatic stay, the government started collecting on the restitution by deducting payments made to Partida as income. Partida sought to hold the government in contempt for violating the automatic stay, but the bankruptcy court denied it.
After the Bankruptcy Appellate Panel of the Ninth Circuit affirmed the bankruptcy court, the Ninth Circuit again affirmed.
"[T]he plain language of the MVRA makes clear that the government can collect restitution, despite any federal laws to the contrary,” the court said. “There has been no violation of the automatic stay because the MVRA trumps the automatic stay,” it said.
The only circuits to consider the question, the Sixth and Second Circuits, ruled similarly, it said.
Circuit Judge Johnnie B. Rawlinson and District Judge William H. Stafford Jr., sitting by designation, joined in the opinion.
Daniel L. Geyser, Los Angeles, represented Partida. The U.S. Government was represented by Assistant U.S. Attorney Daniel G. Bogden, Las Vegas, Nev.
To contact the reporter on this story: Daniel Gill in Washington at email@example.com
To contact the editor responsible for this story: Jay Horowitz at JHorowitz@bna.com
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)