Federal Restitution Explained Part 2: When Restitution Is Holding You Back

Hey, okay, so this is part 2 of our discussion on restitution. Okay, the court's order, the court's restitution order in a case, acts as a lien in favor of the United States against all property owned by the defendant. The Criminal Division of the U.S. Attorney's Office will cause a judgment lien notice to be recorded in all counties where they are aware the defendant owns or may own property While the restitution obligation is outstanding, a number of people who are convicted of crimes are unable to purchase significant items, like homes or boats or cars, because of these liens against them. They may be unable to save for retirement. And that's true even once the term of probation or supervised release is over. A restitution order in a case is enforceable for 20 years. So during that 20-year period, you may not be able to purchase a home even though you're no longer on probation or supervised release. The only way that lien goes away is if you pay it off in full. So I've had a number of people reach out to me and say, "You know, I've been paying all my restitution, I make my payments on time, I haven't had any problems, but I still have a long way to go until it's paid off, and now I can't buy a house." They want to know what they can do about that. Well, it's complicated. The Financial Litigation Unit is the entity that's charged with enforcing these restitution obligations, and their position is that since restitution is part of the judge's order, they do not have the authority to negotiate any type of a resolution. So it's not like you can negotiate with the IRS when you have an outstanding balance. It's not like dealing with the credit card company to reduce your payments. It's not like reducing your probation because you've been behaving yourself since you've been released. A restitution order is an existing debt that is owed, and the government is not likely to remove that lien so long as the obligation is outstanding. In fact, it has been the law since 1994 that federal restitution obligations are not even dischargeable in bankruptcy. So this is the end of Part 2. Please come back for Part 3 to finish up our discussion about federal restitution.