UNITED STATES BANKRUPTCY
COURT
EASTERN DISTRICT OF
KENTUCKY
ASHLAND DIVISION
IN RE:
WILLIAM ANDREW KING CASE
NO. 99-10264
MEMORANDUM
OPINION
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;
(10)
[Reserved]
(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.
Dated:
By
the Court -
Judge
Copies to:
Debtor
David E. Middleton, Esq.
Robin B. Brock, Esq., Trustee