UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF KENTUCKY
WILLIAM ANDREW KING CASE NO. 99-10264
This matter has come before the Court on the debtor=s Motion for Order Stopping Creditor=s Collection Pending Litigation of Chapter 7 Bankruptcy Claim. The debtor is an inmate at the Federal Correctional Institution at Ashland, Kentucky, and appears pro se. He identifies the creditor as the Bureau of Prisons, although as set out below the actual creditor is the Grant County Deposit Bank. The Bureau of Prisons is merely the agent for collection of the obligation. The United States has filed a Motion for Relief, and the debtor has filed a response. All pending matters were taken under submission by an Order entered on August 13, 1999.
The record in this case shows that the debtor filed a Chapter 7 petition on May 6, 1999. He had been convicted of armed bank robbery and judgment entered against him by the United States District Court for this district in February 1994. One of the results of that judgment was the obligation imposed upon him to pay restitution in the amount of $6,707.00 to the Grant County Deposit Bank. This is the only debt he has scheduled for discharge, shown on his bankruptcy schedules in the amount of $6,358.50. As of the date of filing, his restitution obligation had therefore been reduced by $348.50.
The payment of court-ordered restitution by inmates at federal facilities is provided for in 28 C.F.R. '545.10 et seq., the Inmate Financial Responsibility Program. The debtor herein did not articulate that he was participating in the Program, but the Court assumes that since payments were being made on his restitution obligation that they were withheld pursuant to the provisions of the above-referenced regulation. The Financial Responsibility Program is voluntary. The consequence for failure to participate, however, is exclusion from eligibility to receive various privileges set out in the regulation.
The effects of non-participation in the Financial Responsibility Program are set out in 28 C.F.R. '545.11(d) as follows:
(1) Where applicable, the Parole Commission will be notified of the inmate=s failure to participate;
(2) The inmate will not receive any furlough (other than possibly an emergency furlough);
(3) The inmate will not receive performance pay above the maintenance pay level, or bonus pay, or vacation pay;
(4) The inmate will not be assigned to any work detail outside the secure perimeter of the facility;
(5) The inmate will not be placed in UNICOR. Any inmate assigned to UNICOR who fails to make adequate progress on his/her financial plan will be removed from UNICOR, and once removed, may not be placed on a UNICOR waiting list for six months. Any exceptions to this require approval of the Warden;
(6) The inmate will not be permitted to purchase any items in excess of the monthly spending limitation, including special purchase items like sports equipment, hobby crafts, etc.;
(7) The inmate will be quartered in the lowest housing status (dormitory, double-bunking, etc.);
(8) The inmate will not be placed in a community-based program;
(9) The inmate will not receive a release gratuity unless approved by the Warden;
(11) The inmate will not receive an incentive for participation in residential drug treatment programs.
In a case very similar to the case at bar, In re Henry, 213 B.R. 45 (Bkrtcy.M.D.Ala. 1997), the court held that where a debtor who had been ordered to pay restitution participated in the Financial Responsibility Program and never requested that his participation be terminated, the withholding of restitution payments by the Bureau of Prisons was not a violation of the automatic stay. The debtor here has not alleged that he has withdrawn or even applied to withdraw from the Financial Responsibility Program, and his continued participation cannot therefore be deemed a violation of the automatic stay.
In consideration of the foregoing, it is the opinion of this Court that the United States Bureau of Prisons has not violated the automatic stay in withholding payments on the debtor=s restitution obligation, and his Motion for Order Stopping Creditor=s Collection Pending Litigation of Chapter 7 Bankruptcy Claim should therefore be overruled. In addition, the United States= Motion for Relief is moot. An order in conformity with the opinion will be entered separately.
By the Court -
David E. Middleton, Esq.
Robin B. Brock, Esq., Trustee