Federal Restitution Explained

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Federal Restitution is a confusing thing for most people and there is not much information to explain it. Many people have large amounts of restitution that you are being ordered to pay and realistically they can never pay it back. The government knows you can’t pay it back, but they will try their hardest to get as much as they can. The Mandatory Restitution Act of 1996 established procedures for determining the amount of restitution to which a victim may be entitled, and if there was loses, it requires a sentencing court to impose restitution in the full amount of the victim’s losses, without regard to the defendant’s ability to pay.

There is obviously a concern over the size of uncollected federal restitution, estimated as roughly $46 billion. Much of federal restitution is uncollectible due to the fact that the defendants are indigent

That is the major issue with restitution, once someone has been convicted of a crime and have a criminal record their earning potential is greatly diminished, and just affording daily living expenses becomes a challenge for most people with a criminal record, additionally, on top of that, they are expected to pay a percentage of their income to the government.

When you are sentenced and the judge sets a restitution for you, they may set some repayment options for you.

  1. They could add interest to the restitution while you are paying it back.
  2. They can set the amount allowed to be collected, for example, 10% of your gross pay is a popular one judges have set.
  3. They could order a set amount such as $200-$1000 a month
  4. Or the court leaves it up to probation to decide your repayment amount/plan.

Fighting Restitution Before Sentencing

Before your sentenced they will put together a Presentence Investigation Report (PSI). This is a report into the history of person convicted of a crime before sentencing to determine if there are extenuating circumstances which should ameliorate the sentence or a history of criminal behavior to increase the harshness of the sentence. Another important aspect of the presentence investigation report is the inclusion of restitution information in those cases where restitution is a consideration or required by law. This information includes identification of the victim(s) of the case and the precise amount of restitution that should be ordered by the Court. During the investigation into the financial status of the defendant, the probation officer will analyze the defendant’s financial records and will recommend to the Court a repayment plan and any lump sum payments that can be made at the time of sentencing.

It’s extremely important to fight your restitution before your sentenced, once your sentenced it’s much harder to fight the restitution amount. Most of the time they just say you owe “X” amount with no explanation on how they came to that total. You can request an itemized list of the damages for better explanation and fight every item on it, it’s your right. More importantly, the court sometimes makes a mistake and orders someone to pay restitution when they should not be ordered to do so. That’s why it’s imperative you do your own due diligence investigation of the restitution.

Paying Restitution After Sentencing

The 5th Amendment says that they can deprive you of your property without due process. As soon as you are found guilty and restitution is ordered, your property can be taken. Depending on the amount you owe, victims involved, and how bad they want their money, they may move in fast. Expect anything to be taken: home, cars, bank accounts, other assets. Remember anything that has value can be taken to pay towards your restitution.

Paying Restitution While In Prison

This surprises a lot of people but they will can start collecting restitution from you while you are in prison. How much depends on a few factors, such as how much you make at your prison job and how much you receive in your commissary account from people on the outside. The minimum they can start people paying is $25 every three months, but if you receive too much commissary funds or your pay grade from your job goes up, they will raise how much you have to pay. I’ve heard of some people having to pay $150 a month while they are in prison.

Paying Restitution While On Supervised Release

Once you are on supervised release you must pay restitution. You will be asked to fill out a number of forms disclosing assets, income (including income from spouse and dependents living with you), bank accounts, retirement account, etc. Word of advice, don’t lie on these forms, you don t want to go back to prison for hiding assets. If the judge sets up a payment plan at your sentencing, probation will follow what the judge ordered; probation can’t order you to pay more. If the probation officer tries to collect more, you need to remind them the judge setup a payment plan. If there is a change in ability to pay (more or less) probation can report to the Court who can then decide to modify the payments that are ordered. Don’t expect to receive any tax refunds either, the IRS most likely will have you flagged in their system to intercept your refund for payment towards your restitution.

However, if the judge did not setup a payment plan for you, probation will decide your payments for you. This can get tricky for people real fast, depending on what type of probation officer you have and your income; you may have to make payments from $100 – $1000. If you are having financial issues contact your probation officer immediately and tell them so they can work out a better payment plan. If probation doesn’t budge on reducing payments, and you are having serious financial issues, then send anything you can afford to send, since it will be harder for them to argue to a judge to violate your probation for not paying the full amount. Sending something (anything) makes a different statement then sending zero.

Paying Restitution When Supervised Release Ends

A common question I hear is, “What happens when I’m off supervised release? Do I still owe restitution?”. When you finish your supervised release this does not release you from restitution liability; your restitution will be transferred and supervised by the Federal Litigation Unit (FLU) for the next twenty years. YOU CAN NOT GO BACK TO PRISON once you are off supervised release if you attempt to avoid pay your restitution. When you are off supervised release your restitution will become a civil matter. The FLU will send you financial income reports to fill out. It’s up to you if you want to fill them out or not, these income reports are voluntary but if not furnished the US DOJ may seek disclosure through other means.

The FLU is seriously behind on collecting restitution at this time (some people do not hear from them for years). One source had this to say about the Federal Litigation Unit on collections:

The Federal Litigation Unit rates the cases on a scale from 1-4. 1 cases are the priority cases. 4 cases are not given a second glance. Cases are revisited every four years. They simply do not have the time, money or other resources to pursue every one. They are not going to reprosecute you, put out a warrant for your arrest or put you back in prison. They are a joke. If you left the country owing restitution, enjoy your time. They are not going to come looking for you.

The FLU can do the following to collect the restitution:

  • Garnish your paycheck up to what your state allows for garnishment, 15% is common.
  • Take your federal tax return refund (if any).
  • Place liens on your home and land.
  • Seize your assets.
  • Take your 401K, IRA, Roth IRA, investment, and retirement accounts.
  • Take part of your social security check.
  • Empty your bank accounts.
  • Take an Inheritance that a deceased family member has left to you.
  • Your pension once you start receiving it.
  • Much more.

The FLU however will not let you starve, they will leave you enough to live off of. Just remember when your restitution is under the FLU’s control you have rights too, consult an accountant and/or lawyer when you want to protect yourself and know your rights.

When Does Paying Restitution End?

The general rule is that a restitution judgment is enforceable for 20 years after a defendant is released from imprisonment. According to a DOJ website, “A defendant’s liability to pay a restitution order lasts twenty (20) years plus any period of incarceration, or until the death of the defendant.” See 18 U.S.C.A. § 3613. If you were in prison for a while, the 20 years starts from your release.

Common Federal Restitution questions

Question – Can I discharge my federal restitution by declaring bankruptcy?

Answer – Federal Restitution can not be discharged with bankruptcy. There have been a few rare occasions that it has been allowed because the individual who owed it was severely disabled and could not work and paying back restitution would put economic hardship on their family.

Question – Can I get a mortgage to buy a house if I owe restitution?

Answer – Every mortgage application I have reviewed has a Declarations section that ask the following, “Are there any outstanding judgements against you?”. This applies to restitution too and mortgage loan fraud is any misstatement, misrepresentation, or omission made by someone trying to get a loan which is relied upon by a lender, so don’t try hiding it.  All mortgage companies and banks I’ve talked to require anyone who has a judgement against them to satisfy the judgment before they’ll give anyone a mortgage. They do this because they know the chances of a lien being placed against the home will occur and most people are likely to stop paying the mortgage.

Question – The company I owed federal restitution went out of business, do I still owe the money?

Answer – This is a really tricky one that could have a few answers. Here is the best answer I found,

It depends on whether anyone has a right to that payment. If the company was a d/b/a or sole proprietorship, the owner would likely still be entitled to the payments. If the company’s assets were acquired by another business, the acquiring one probably also received the right to your payments. If the company went bankrupt and liquidated, then the bankruptcy probably contains a provison to collect payments like these and distribute them to creditors.

On the other hand, if a corporation or LLC was dissolved without anyone taking over the interest in this debt, then the debt is probably wiped out.

You should make good faith efforts to find out the status–call all contact numbers, write to any contact addresses, etc. If you can’t locate a responsible party (and if you do, don’t simply take their word for it; you can ask for proof or documentation of their right to the payments), then you might cease payment while being prepared to resume it if it’s demonstrated that you need to. source: http://www.freeadvice.com/law-questions/the-company-im-paying-res-39272.htm

Question – The person I owed federal restitution died, do I still owe the money?

Answer – Yes you do. After the persons death the restitution is transferred to the person’s estate, which will be transferred to their heirs. Therefore you restitution will become part of someone’s inheritance.

Question – Can my spouses assets and property be taken to pay my restitution?

Answer – This is a tricky question, but yes they can. Anything that is jointly owned by both of you is game, any joint bank accounts, retirement accounts, property, homes, vehicles can be taken. For your spouse to protect them self they need to take a serious of steps before you are sentenced to equally separate any financial accounts and transfer any of their property into their name. Attempting to transfers all your assets to your spouse will not work, any assets that you have transferred or sold since the date of your arrest, or any assets that someone is holding for you is fair game to be taken. Even divorcing to protect your money and assets may not work either, the U.S. Attorney’s Office may claim that the divorce was just a way for the couple to avoid paying the restitution. Talk to a lawyer to figure out how your spouse can legally protect them self. Don’t try transferring to other people or business entities either to try and hide or protect the asset, these are called ‘nominees’ and will be nullified and seized.

Question – Can I settle my federal restitution with the victim for a lower amount?

Answer – Yes you can, but only if the victim or victims agree to it. This is lengthy process that requires a lawyer. Do not contact the victim’s directly, have your lawyer talk with probation and the US attorney’s office first so they can contact the victim’s to see if they will agree to a smaller settlement. Also, if you think your money woes end when you settled that restitution, think again, because forgiven restitution becomes taxable income! Why? The U.S. Internal Revenue Service considers forgiven or canceled restitution as income. Taxpayers must report that portion on a 1099-C forms.  Don’t think not filing the 1099-C form will get your off the hook, the Federal Litigation Unit once notified the restitution has been settled or negotiated for a smaller amount will notify the IRS about the forgiven restitution and the IRS will be expecting that 1099-C form on your tax return at the end of the year, and not filing it could lead risk of IRS audits, penalties, fines, or possible criminal charges. How much will you owe? That’s hard to say, there are various factors that need to be considered such as the forgiven amount, your liabilities,  assets, etc, this will best be answered by an attorney and tax professional. Don’t expect to walk away not owing the IRS any money.

Question – My Paycheck is being garnished for Child Support payments, can they garnish more to pay my restitution?

Answer – If there are already garnishments on your income at your states maximum garnishment percentage, they cannot garnish more. For example if your state has a maximum garnishment rate of 25% of your pay check, and child support is taking that 25%, they cannot garnish anymore to pay towards restitution.

Question – Can I deduct my restitution payments on my taxes?

Answer – No you can’t deduct your restitution payments on your tax return . Restitution is considered a penalty, and under the IRS tax code you can’t deduct penalties, fines, or restitution.

Question – Can my pension be taken to pay restitution?

Answer – Pensions can only be garnished to pay off court-ruled restitution when a participant is eligible to receive pension benefits under the plan. This means when you start collecting your pension fund, it can be garnished to pay restitution in criminal cases according to a recent ruling by the U.S. Court of Appeals for the 9th Circuit. The court held that the Victim’s Restitution Act of 1996 clears the way for victims to go after funds held in an individual’s pension account when seeking restitution in criminal cases. Prior to this ruling, courts followed federal pension law, the Employee Retirement Income Security Act of 1974, which specifically holds that pensions cannot be used to pay restitution.  source: http://www.pensionrights.org/issues/cases/court-rules-pensions-can-be-sought-after-pay-restitution

Question – I owe of restitution, what happens when I retire?

Answer – Retirement does not release you from your restitution liabilities, as long as the FLU says you owe money they will continue to try to collect it, and they can garnish a part of your social security and pension to get it.

Question – Can my Social Security be taken to pay restitution?

Answer – Social Security benefits are usually protected from garnishment and levy, but restitution can be garnished under the Mandatory Victim Restitution Act of 1996. source: https://faq.ssa.gov/link/portal/34011/34019/Article/3812/What-are-the-laws-allowing-the-garnishment-and-levy-of-Social-Security-benefits

Question – How can avoid pay my restitution once I’m off Supervised Release?

Answer – That’s a question I’ll leave up to your accountant and lawyer to explain. Once you are off Supervised Release your restitution is now a civil matter and the FLU can do more than regular debt collectors can collect the restitution. You can do just as much as you can to avoid a normal debt collector as the FLU. The only way I know for a person to avoid paying their restitution entirely is for them to die or leave the country.

146 thoughts on “Federal Restitution Explained”

  1. I can tell you first hand the flu can and will come after you for restitution. I was convicted of a conspiracy case in 2001. No real victims. We hacked cell phone service. Free airtime for us and friends. Was found guilty and sentenced to 3 years probation and $675,000.00 in restitution. During my 3 years probation I paid 1,314.00. I was unemployed and paid what I could. I was let off probation in 2004. I started getting letters from the financial litigations unit. Wanting my financial statement. Bank records, credit lines, any assets I had as well as my wife’s info. I ignored the letters for over a decade. 13 years after being off probation I got ordered to court. A federal magistrate I went in front of. She ordered me to submit all bank recordes as well as all of my wife’s records. I was shocked as I am just a carpenter working non Union making $18.25 an hour. My wife also works a similar paying job. We have 2 children 8 and 3 years old. We barely make rent don’t own a house and share one care. A 2007 Impala with 98,000 miles on it. After submitting the records the magistrate ordered me to forfeit 2,438.00 we had in a savings for our 8 year old son to attend college when he became 18. She also found that we spent $147.00 a month on junk food. Ordered me to make that payment on a monthly basis. Once a week our family would have a pizza night. This was not found appropriate by the magistrate. Two car washes showed up on our debit card. She was not happy with that!! The fuel charges on our debit card she wanted proof of mileage driven. Said we could be buying gas for people in trade for other things. Now keep in mind. We have NO credit cards. We don’t qualify for them. Could be from all the Hard Inquiries the flu will put on your credit report each year. So for all of these people saying the flu is a joke and they can’t bother you after probation. Well I am here to tell you. Yes they can and they will. You can ignore the letters. When they start coming certified. I promise you. Your days are numbered before being ordered to court to fill out the form in front of the magistrate.

  2. I owe federal restitution for 16 years now and have recently gotten married. Although my husband and I do not share a bank account or any properties what information am I legally required to share with the courts since they have recently sent me another application to be filled out with his information to determine whether I should pay more money each month.

    • There was (are?) case’s that had to do with when resitution was ordered if the judge did not order it to be paid in full right away; some cases stated that it was an issue of who had legal authority (BOP – U.S.Courts) on who or when even if payments had to be made at all. RSVP. TY

    • In 1991, the federal government amended the garnishment guidelines to preclude levying or garnishment of SSI disability benefits. SSI is a need based disability benefit so there can be no levy or garnishment against it.

      • Not true. I get 10% by statute removed monthly out of my SSDI. I am totally disabled! Bush administration changed the rules. The SS office sends me statement each month showing the money withheld and sent to restitution.

        • SSI and SSDI are different. SSI is not based on any earnings. It is for disabled people who have never worked and the most you will get per month is a little over $700. If you live with someone like your parents, it is reduced by 1/3 because it is assumed you are not paying for food or a roof over your head. SSDI is for individuals who have worked, paid into social security and then become disabled. The amount they receive is based on what their income was during a certain time before they became disabled.

  3. I married my husband AFTER he was release from prison and they set up his restitution payments. I did not know him or had any prior knowledge of his charges. But recently the FLU has come after us with both barrels. My husband is now a pastor of a small church and I have a full-time job. We had our annual meeting in June 2016 and the gentleman in charge was mad because I had purchased a new travel trailer in my name only. Keep in mind we were already making a trailer payment on a used 1994. The new trailer was the same payment amount. The man said, “that really sticks in my craw.” My question – how did he know I had bought a new trailer? My husband was not on any of the paperwork or title. Hmmm. I work hard and don’t feel like I should be penalized for this past mistake. He owes $600,000 to the federal government. I calculated that IF he lives to be 75, and IF we could pay $2400 per month we could pay off this amount. The original amount was $120,000 but with penalties and interest if has ballooned into a ludicrous amount we can never pay off. And we have to go back before this man AGAIN in December 2016. Why?

    • It’s the federal government they can’t find out everything you spend money on, even if your husband name is not on it. You need to consult an lawyer for proper asset protection and separate out your fiances so the FLU can not touch you.

  4. Isn’t the person’s estate responsible for the restitution? That could affect one’s home and joint bank accounts etc. with their spouse.

    • Yes you’re estate is responsible to cover the restitution, but they can not go after your family for the remaining balance of the restitution the estate did not cover. Please consult an attorney.

  5. Is there a way to waive the remaining amount owed to the FLU if the remaining amount consists solely of the interest accrued? I paid off all of the restitution and have been off of probation for 11 years now but still have $19k owed that is just accumulated interest. Possibilities: Go to the judge and ask them? Go to the U.S. Attorney and ask them?

    • yes you can, but unlikely. Also remember, the U.S. Internal Revenue Service considers forgiven or canceled restitution as income and you will be taxed at the end of the year and owe the IRS a large amount of money.

    • If one labeled a “nominee” for another’s restitution for a disputed property; How long does that last? What are the statute of limitations?

      • If you’re listed in a judgement as nominee” for another persons restitution, then judgments can last up to 20 years and that judgment be renewed again.

  6. Can the department of justice go after my husbands pension or social security for monies I owe for restitution. I am paying the maximum from my SSI.
    He is paying $1300 to IRS from his SSI of $190

    • No they can not go for your husbands pension or social security.. But they include his money as part of your joint income and could order you to pay more.

  7. Hello,
    I was ordered to pay restitution even after the company that I took the money from did not come to court and send a letter that was read in court saying basically they did not want to peruse the case and wish me well. I was reported by a credit card company for fraud, they came up with a ridiculous amount I never took, the paper from the credit card company said 15k and now they want me to pay 123,500. Why do I have to pay the Fed’s and not the company I actually owe to?

    • Nothing you can do.. The US courts order restitution even if the victim doesn’t want repayment. You may have not taken that amount, but restitution includes damages too, so the cost of the investigation to the company, third party damages, loss man hours, corporate investigators, etc.

      You should of asked the court for an itemized list to break down what the restitution was paying.

  8. Question-Is the 20 year limit on restitution still active. I was convicted in 1997 and have been paying ever since I was released in 1998.

    • Yes it is, It starts when you probation ends the the FLU is assigned your restitution by the US Attorneys office. Even when the 20 years is it, the FLU can renew the restitution another 20 year.

  9. Can you explain this
    September 19, 2016 at 5:49 pm | Reply

    Doesn’t matter what trumps the other, if you owe to the FLU and on a civil case you’ll have to pay both.

    I have been paying restitution to the flu and now the victim is filing a petition to register a foreign judgement, so I’m wondering if I would have to pay the FLU and be garnished, and my restitution is joint and several with another debtor so how do they know if it’s paid off if the other debtor is in another state/county.

    • I’ve actually heard of situations like yous. To sum this up, you and another co-defendant owe restitution. Your co-defendant is no longer in the country, so the victims are trying to get a foreign judgement on them in the country they are located in to collect.

      Sadly getting a foreign judgement on a citizen in another country is not very likely. These countries have their own foreign sovereignty and courts in these countries know by enforcing a foreign judgments they are giving up their sovereignty. Sometime this can collect if these countries have an international treaty for these situations, but most don’t.

      What’s unfortunate is the people still located in the US are forced to pay the full amount of the restitution as the people outside the country don’t and nothing can be done to them either..

  10. Hello, I am almost finished with my 5 year federal probation. I have 45 days left, and I’ve been disabled with a back injury for 3 1/2 years now and on Employer Long Term Disability. Me and 2 Co defendants all owe 98k jointly, liberally, and severally. I’ve paid them over 25k in the last 5 years. MOST of it went to interest the judge never ordered! Also the judge told me I’d get off probation early for good behavior l, and I’ve remained a perfect citizen. However, I’ve paid them roughly 8k before I got hurt leaving work in a car accident, now I have herniated disks and live in chronic pain, now the restitution department is talking of coming after me for 15 more years ! BUT now my crooked LTD cut my money off completely, and I have no income at all to pay restitution nor can I work ! So the last 3 months of probation, I can’t pay them or my bills ! My lawyer is appealing my LTD appeal but this could take at least 90 more days, and the judge imposed 98k in restitution stating I seem able bodied and capable of working, well I haven’t been able to work for over 3 years! BUT their still taking my money and my taxes from my first 2 years of work. CAN they legally take my LTD money ? AND my PSI was wrong, only had 5 days to review it, and I appealed it, so now I want to appeal the restitution because the banks where federally insured, and I have to pay back the banks! ANyway, my probation office said I can’t get off early, bc I owe restitution! BUT judge who sentenced me knew restitution was imposed ! Then PO told me to always pay more, so they would terminate the restitution when I finished the 5 yr sentence, now their saying it’s all been a lie, and theyre coming after me anyway when I have no ability to work, or provide for my fiance and 2 kids ! Then I was also beaten by guards in the prison, and had to file suit against the prison ! I’ve just through so much, and I’m so tired of paying for this same mistake ! ME and my family have suffered enough! We can’t get married, they’ll garnish and lean her income and assets, I can’t finance a backsurgery, a home, a truck or anything… Enough is enough…

    • “MOST of it went to interest the judge never ordered!” Judge doesn’t order interest, Mandatory Restitution Act of 1996 makes all restitution have interest attached. Though at sentencing a judge can waive the interest on restitution.

      “CAN they legally take my LTD money ?” – That’s up to the court.

      “now I want to appeal the restitution because the banks where federally insured, and I have to pay back the banks! ” – You can do that, but then they’ll just transfer your restitution from the bank to the US government who insured the money, which means the restitution will be paid back to the tax payers who covered the insurance bill.

      “my probation office said I can’t get off early, bc I owe restitution!” – That is usually always true.

      “Then PO told me to always pay more, so they would terminate the restitution when I finished the 5 yr sentence, now their saying it’s all been a lie” – Restitution pretty much can never be waived.

  11. I want to purchase a home with my boyfriend, however he has a 70,000 restitution fine. Will they put a lien against our home, if we do so.

  12. My husband just got off paper and received paperwork changing restitution from 150 a month to 1000 a month. Is this the max? Just want to know it can’t get even worse.

  13. Does the restitution go to the victim, even if all damages were covered by the victim’s insurance? In that case, does the restitution just go to the government?

    • That is up to the US attorneys office to figure out who the restitution goes to. If insurance covered the damages, then the restitution payments will go to the insurance company.

  14. I pay restitution every month and my taxes are been taking since 2010.
    My penalty is for 20 years.
    My fiance and I we want to apply for a Grand to buy a House.
    I’m able to do so, without no problem?
    Don’t know if after doing all paperwork I will be denied and loose my down-payment or any situation will appear after the house is purchased.
    Advise please, to be able to get out of those papers in time.

    • This has been answered above.. People with restitution find it nearly impossible to get mortgage since you have to disclose the restitution on the mortgage application. Furthermore, if you have a home in your name you run the risk of having a lien placed on it.

  15. If I have a life insurance policy and have restitution to pay will the federal government take the proceeds or allowed to from my beneficiaries ?

    • No they will not take away the proceeds going to the beneficiaries. Though if you’re listed as a beneficiary on someones life insurance or retirement account and they pass away, the government will try to take those proceeds.

  16. Thanks for providing some much needed information. I am in the early stages of probation for IRS fraud. They got me for $105K restitution and 5 years probation. After seeking legal advice when the DOJ letters started coming in, this is what I learned. The first letter i got was called “Notice of Intent to Offset”. This letter gives me 60 days to provide evidence to the DOJ to keep me off a program called Treasury Offset program. This was very important to me, because the DOJ can only snatch up refunds and garnishments if you don’t respond. As long as I was current with my court ordered payments, and I could prove it, I qualified to keep myself off the program. And i only had to pay a lawyer $20 to find this out. It’s a cool program Texas has for 30-minute consults. More info on that if requested. When I received the Financial Disclosure Statement, I went to seek legal advice again. I was aware that it is Voluntary and it even says it on the form, but the lawyer couldn’t find any thing on the statement that is on the form. You also mention this in your answer above. The statement is: “these income reports are voluntary but if not furnished the US DOJ may seek disclosure through other means.” My question is…what is “other means”? Any idea? I chose not to give them the info. I figured, if they really wanna know what I own, let them find out on their own! But I know they have to follow the law and procedures. Any clue on what those procedures are?
    My second question is, when I was waiting to be sentenced I was reporting to a place called Pre-Trial Officer. I filled out forms and they made home visits, very similar to probation. Well this office and officer shared the information they had on me with the DOJ. Is that Legal? And, now that I’m probation, will my PO share the information I give him with the DOJ?

    Thanks a bunch for creating this forum

    • Question One: They’ll order you to court and have a judge force you to fill out the paperwork or hold you in contempt of court.

      Question Two: It’s the federal government, they do what they like, wish I had a better answer.

  17. The FLU use Title 28 , part VI chapter 176, subchapter A, sec 3002 (B) (5) for Definitions,

    3002 (B) (5) talks of Disposable earnings, ,”means that part of earnings remaining after all deductions required by law have been withheld.

    Question: I ask the FLU to let me know what form or list that shows what you are allowed, (after you are off parole). I wanted to know what I am allow to keep of my income to live on. Do they follow the IRS Collection Financial Standards? They are taking 15% of Social Sec. now . I just got off parole and are free now to move, but before they take any more SSI do they have to get a court order, as the court ordered to pay 50% of disposable income. here is the court order and what the FLU wrote in a letter to me. “Upon release from confinement, the defendant shall make monthly payments of at least 50 percent of his disposable income per month during the entire term of supervised release.” , This does not address how it will be handled after release and how the determine the amount after my monthly expenses.

    do you know what the do and what is the form the go by to figure your monthly expenses.

    not quilty

  18. I currently owe a million dollars federal restitution and i’m in poor health. I have a house thats fully paid for worth 200k. what happens to my house if i die? If i create a will can my children inherit the house? If not can my children buy the house from me?

    • That’s a complicated one and you’ll need a lawyer on this. If the house has a lien on it then you’ll have some issues. The liens can prevent that property from being sold. Lastly, because property liens attach to property titles and not to property owners themselves, they frequently survive owners’ deaths. Meaning the children who inherit the house with the lien on it.

      But in the case of restitution the house becomes part of the estate after death, which means it can be sold out from under the heirs to satisfy your restitution debts.

  19. I owe restitution. My question is since my husband doesn’t owe restitution, can he purchase a home as his sole and separate property without having the FLU come after it? Or will they consider it my property as well even if I did not contribute money for the purchase?

    • That’s not up to the FLU, that’s up to the victim. Your lawyer should contact the United States Attorney’s Office and the victims to see if the victim would be willing to accept a lower amount of restitution. If both parties agree to the settlement, the court may modify the original order upon the defendant’s petition.

      Also, the remaining unpaid balance will be taxable income because forgiven restitution becomes taxable income. The U.S. Internal Revenue Service considers forgiven or canceled restitution as income.

  20. I am in very unfamiliar territory here. My husband is still in prison and owes about $27k to the federal government in restitution. I recently found out that the feds put a lien on our home (neither my husband or I got notice of it – I found out when applying for a home improvement grant). Our attorney had said before sentencing that they wouldn’t go after our assets as long as he was paying his restitution while in prison, which he has been. Does the government automatically put a lien on mortgages when restitution is owed? Would this also mean that even though my husband is still incarcerated, if I wanted to sell our current home and purchase another (looking to move closer to work and school for the kids) they would take what is owed from that?

    • I’m sorry to hear about your situation. Unfortunately your lawyer your was wrong that won’t go after your assets or place a lien on your home, they have the power to collect any want necessary to satisfy the restitution. The issue is selling a house with a lien is really difficult.

      “Would this also mean that even though my husband is still incarcerated” – If his name is on the mortgage or property the home is an asset of his.

      “if I wanted to sell our current home and purchase another (looking to move closer to work and school for the kids) they would take what is owed from that?” – They won’t take it all, they will take the equity that is built up in the home. So if, for example, you are selling a house for $100,000 and you owe $80,000 on an existing mortgage and the lien is $5,000, then at closing, the existing mortgage and the lien would be payed out of the $100,000. That would leave $15,000 as your net.

  21. Thank you so much! Do you know where I would go to find out information about the lien specifically? Like, how much it is for (I would assume the entire amount, but…) and the conditions of it?

    • To find out information about the lien you have two options.

      1. Search the county recorder, clerk, or assessor’s office online. All you need is the name of the property owner or its address. If your county does not have the data online, then you’ll have to do option 2.

      2.. Visit the county recorder, clerk, or assessor’s office in person. Generally, you will find the people in these offices will be quite helpful, and they can even give you pointers if you need help.

  22. Do you know the rate of judgement renewal? How often is the judgement renewed after its 20 year expiry? Are you aware of what would instigate the renewal? Can one hire an attorney to get in front of the renewal and potentially stop it from happening?

  23. I am in the middle of a divorce and have been accused of embezzlement from a non profit event that I was in charge of. The accusations are 100% false, but we have made the decision to settle and pay the restitution as it is cheaper then litigating. Due to the divorce, will my spouse be responsible for 50% 0f the restitution and legal fees, given that were married during the time they are claiming the embezzlement took place?

    • Your lawyer can explain this, but no, the spouse is not responsible for the restitution if they had no involvement. But joint assets could be taken to pay towards restitution.

  24. My situation: my husband has substantial court ordered restitution owed jointly or individually by half a dozen fellow conspirators.
    My questions:
    1. how can I find out what has been paid by other so far ( sentenced in Federal Court in NYC)?
    2. once out of prison can they decide on payments that exceed his income, in essence deciding I should be being part of it? on supervised release? after supervised released?
    3. My children, both adults, are listed as the benefactors on my pension, life insurance, and 401k. I understand I may have to have my husband sign something waving his rights to these. Would that sufficiently protect my children’s right to the money ?

    • 1. If he is still in prison the US Attorneys office can answer that, but usually they want your lawyer to contact them. When he is out of prison the probation officer can tell you. Once the is off probation, then the FLU can answer that.

      2. That’s a complicated question, did the judge set a repayment plan? If not it’s up to the probation department, and yes, they could take your income into account on how much he should pay back. They will see you could have more then enough to cover all the basics, housing, food, bills, etc, and make him pay a larger percentage of his income towards restitution.

      3. You need to talk to an estate/trust attorney to work all this out, but it sounds like your on the right track. You should also talk to that estate/trust attorney about protecting your joint assets such as your home, cars, valuables, and more.

  25. I’m almost done paying my restitution off. How will I now if the victim has been paid? Will I get a receipt and will my case be closed?

  26. I was released from prison a year ago. I owe $968k in restitution. Last year at our Income Tax Return we files Married filing jointly. My wife had to work while I was in prison so she had income, but due to my restitution the refund she was expecting went away. Should we file this year as Married filing separate? Would that allow her to keep her refund and the government not go after her money. I know they will still go after mine, but I assume they will not touch hers anymore. Am I correct?

  27. A spouse resides in NY but was convicted of a crime in PA and is serving time in PA and owes restitution to a PA business. Will the NY property that is jointly owned have a lien on it to collect restitution? If the spouse divorces him before he is paroled can she sell the property and not have to pay his restitution from the proceeds?

    • “Will the NY property that is jointly owned have a lien on it to collect restitution?”
      – No clue, all depends if they put a lien on the property. To find out information about the lien you have two options.

      1. Search the county recorder, clerk, or assessor’s office online. All you need is the name of the property owner or its address. If your county does not have the data online, then you’ll have to do option 2.

      2.. Visit the county recorder, clerk, or assessor’s office in person. Generally, you will find the people in these offices will be quite helpful, and they can even give you pointers if you need help.

      ” If the spouse divorces him before he is paroled can she sell the property and not have to pay his restitution from the proceeds?”
      – All depends if there is a lien on the house. Also, if the spouse is named in the deed as a joint owner good lucking selling it, you’ll discover the hardship of trying to sell the home while one owner is in prison, you’ll need to talk to a lawyer, it’s not as easy as you think. Both owners need to sign off on the sale, if one refuses you’ll have to fight it in court.

  28. I’m in the process of getting off my 3 year probation I got papers from my po to fill out it’s the financial statement papers, he said something about giving them to the judge? I still owe restitution and I pay monthly and also they actually garnish my disability my question is what happens next after I fill these out and return them?

    • This is actually common when people end their probation.. They’ll evaluate your finances and decided your payment plan after probation ends.

  29. Plse someone help me with this… My husband is fed camp and have to pay restitution ..We have to file tax and we have a minor… and need that refund desperately
    can the take that money away.. i do not know if i need to file as head of house hold or separate .. i am lost,..
    Thank, you

  30. I am paying down restitution from 1999. I recently submitted the financial paper work requested, but was advised they did not receive it. I have since been garnished from payroll 25% I am trying to drop the garnishment down to 10% as I am head of house hold be cause i carry my 20 year old son who is in his last year of college. FLU advised since he is over the age of 18 that I can not be considered for the 10%. She further advised she would speak with her supervisor to confirm. She is not willing to review my tax paper work until after the 20 day wait. I have a couple questions:

    1. in the state of Missouri head of house hold require makes the person exempt and can be lowered to 10% once documents are submitted.
    2. Should I request a hearing within the 20 days allowed petition for 10% garnish?
    3. I have a little over 7000 remaining – 4000 from 2016 taxes. The remainder is intrest. can I get the intrest forgiven?

  31. I have a FLU lien for over 2 million against me. I also have a Federal IRS Tax lien for over 200K as a result of that case. I don’t make a lot of money, but I have been paying a payment every month on the FLU portion for over 9 years. My wife is divorcing me currently. If the judge orders a judgement against me in her favor, does that judgement fall behind the FLU and the IRS liens in priority of payout?

    • Oh wow.. I don’t know the answer to that one.. With that type of debt owed to three sources I would just leave the country. You’ll need to consult an attorney since I don’t know the answer to that.

  32. How does the FLU figure out your payment? It’s my debt not my husband will they include his income in figuring out my new restitution payment? We did speak with my attorney and was told legally they can not include his income for my debt, I just don’t want any surprises when I go see them next week.. I am disabled and get $870 a month they garnish my check of $120 and I have to make the $80 difference of my court order rest payment of $200.. what can I expect.. thank you..

  33. I have a question my husband and I are married I owe restitution, so there is a lien in our house. His family owns land and wants to put it in my husbands name as it is their family farm can the government take it

  34. My wife was involved with my crime, but I was given the choice to sign a plea and they will leave her alone. I did that, but now I am out after 5 years and she wants a divorce. Is there a way that I can prove she was in on the crime and have her responsible for the restitution too. I did all the time for both of us, but it’s not fair that I have to pay all the restitution for our crime.

    One other question. The judge never set a payment schedule up and I owe millions. I am able to make good money. How much is the max that they can take from me? I get paid without taxes taken out, so I was wondering, if they were to take 50%, they are going to put me in more tax debt too.

    • No, to late for that.. Plus if you went back to the courts trying to now say she was involved you could get slapped for lying to the US attorney and Federal courts and face new charges.

      As for how much can they take? that is up the FLU and the courts.

  35. Our small S-Corporation has a federal felony conviction and $374,000K fine/forfeiture that the judge permitted be paid at $3,500 per month. Two years have gone by and we have not missed any payments, However, the S-Corp is suffering under the weight of this hefty fine and has poor sales due to bad publicity regarding the felony. How are corporations treated if they can’t pay the fine and don’t own any property or have any real assets to speak of? I guess my question really is: Will the Feds go after the corporate officer’s personal assets, or can the officers be jailed for not paying on behalf of the S-Corp? We are seeking legal counsel to figure out a way to dismantle the Corporation since it may not be able to stand on it’s own much longer, but both attorney’s we have sought counsel from seem to be at a loss in answering the question in any definite way.

  36. I received a financial package today from the FLU. In it they requested all of my current information. I had not filled out any new information since 2012 when I completed probation. I was paying 500 a month without a mistake until I was injured in June 2013. I have had 4 surgeries since and lost my job. I am currently facing foreclosure and am in mediation. After all of the years have passed since pleading guilty for 100% of something I had a small role in I got a package from the FOA and my court appointed attorney with held information from me and the court. I am being cleared to return to work as of May 1 with a 20 lbs lift restriction for the rest of my life.
    My two questions are should I speak with the Federal Defenders Office and see if my judgement can be changed.?
    I have zero income and am just trying to save my home by getting help from family, friends and my church. Can the FLU just step in and take my home and sell it for the equity or can they not mess with your home. I have a 1 year old and a 8 year old living in the home with my fiancee and myself.

    • 1. Doubtful, the time to challenge this has passed.

      2. They will not take the home and sell it out from under you. They “could” place a lien on it though and take the equity if you ever sell it.

  37. Question: I currently owe a restitution of 90k along with 3 other codefendants. I’m about to get married in several month and we’re looking to buy a home. If the wife was to put the house under her name, can the government put a lien on the house? My other question, when I was sentenced I was ordered to pay 10% of my net income a month, when I’m finished with supervision does the FLU continue to order the same payments or can they raise or lower your payments as they wish?

    Thank you

  38. my dad was sentenced in 1998 to non-tax restitution and a substantial lien placed on his home. At the time of his death in Jan 2017 he was having 15% taken by SSA from his social security monthly to pay for this debt. I found information that stated the lien expired after 20 years or at death. However he died after 19 years and the lien was still being enforced at time of death. Does this lien now pass to his estate and prevent his heirs from selling the property? The amount of the lien is more than the property is worth, so unless it was released or abated, I assume we are stuck with no option??? We are not being kept informed by a sister who is the executor, so we have no idea what is going on? Any help you provide will be so appreciated!

    • Have you confirmed the lien is still active?

      1. Search the county recorder, clerk, or assessor’s office online. All you need is the name of the property owner or its address. If your county does not have the data online, then you’ll have to do option 2.

      2.. Visit the county recorder, clerk, or assessor’s office in person. Generally, you will find the people in these offices will be quite helpful, and they can even give you pointers if you need help.

  39. I owe restitution with a co defendant. Been off probation 3 years now. Was paying my 10% while on probation. Since I’ve been off haven’t really paid. They keep my tax refunds and I recently did a short sale on my house and they kept that money. My question is I have a personal injury lawsuit pending..will they take that money to?

    • Talk to your attorney assisting with your personal injury, never seen this situation happen before and don’t have any advice.

    • Court may not order criminal restitution to be paid from Social Security Disability benefits. The Court of Appeals determined, in In re Robby Lampart, Case No. 315333, that a court cannot order a person to satisfy a restitution obligation from his or her social security disability income benefits (“SSDI”).

      You’ll need to consult an attorney first, and they will to assist you and modifying the terms.

  40. I have a friend that asked me to keep money for her children in my account. Is this illegal? What are the consequences of doing something like this? Her daughter is old enough to have her own account (14) but will they take her daughter money? Or could I go to jail?

  41. I’m about to close on a home in Texas. My husband is incarcerated and will owe restitution when he returns. Do I have to put his name on the deed? I’m financing the loan with my name only.

  42. Can a person sale assets and before they are convicted and ordered to pay restitution even though they are pleading guilty to the charges? Will the Feds be able to hender the sale and or demand money before conviction?

  43. i received a certified letter from FLU unit to appear to show cause why I have not entered into arrangement for payment of the judgement entered against me in 2011 as the i have not paid restitution after supervision for one year now. I like to ask you should I appear or should I get a attorney to go for me all I like to do is enter a arrangement to start paying per month as low as I can. also like to find a attorney to take care of this for me in Los Angeles?

    • That’s entirely up to you if you should seek counsel on this. Your not going to be put in prison for not paying. The FLU is going to want you see all your fiances and probably have you fill our various financial forms laying out your income, expenses, bank account, retirement accounts, investments, and more. If you lie on those forms you can face criminal charges.

  44. My husband owes restitution and is still in prison. While he has been in prison I purchased a home in my name. I live in Texas, a community property state, and it is my homestead. I want to sell as I can no longer afford to keep it and need the equity. Will they take my proceeds from the sell from me?

  45. I’ve been paying restitution since 2004. I have an outstanding restitution balance of $477,000. Recently I filled out a new financial analysis at the request of the Dept of Justice. They want to increase my monthly payment from $300 to $525. It’s. It the end of the world but it makes things very tight in the household. Is it worth it to get an attorney to try and negotiate the increase or am I fighting a losing battle?

    • I don’t, the law is pretty straight forward, the home is in your name and if there is no lien on it, you will not have any issues. Anything else you need to consult an attorney.

  46. in your opinion do you think that me contacting them will most likely result in the same results an attorney could provide?

  47. I want to make my nephew a 25% owner and officer on my s corp
    But he owes $300k in IRS restitution
    Can the IRS attach or levy the corp if he becomes part of it?

    • I’ve heard of situations of the government taking the owners shares away who on restitution from them and the government is the new shareholder till they can sell the shares for fair market value to help satisfy the restitution, which can open yourself up to an outside buyer if you can’t raise the funds to buy the shares back. I recommend you talk to your business attorney.

  48. My husband passed away while incarcerated, I went to apply for widows social security benefits. My question is does the FLU have any rights to the payments I will be receiving?

  49. My Fiance was released from federal prison in December and is now on probation and ordered to pay restitution. I understand that any joint assets would be fair game for them to take, but can they touch my wages or vehicle or anything already in my name before the marriage? What if I purchased a home in MY NAME ONLY after the marriage- would they be able to take that since we are married?

  50. I still owe a 70k restitution. My fiancé and I get married in a month, do you think it’s wise to have joint bank account or should we leave them separate? Or does it even matter?

  51. Looked through all above and don’t think this one covered yet. I owe federal restitution that I pay on every month that I will never fully pay off in my lifetime. I have been building my house by hand myself on my parents property for last 5 years and now done. I am also married for many years. With my parents now getting older I’m starting to now worry about losing my home if something were to happen to them. I know the most likely course of action is to place a lien from reading above comments long as I’m making payments. My question is if my parents were to leave the property to my wife and not me, would that protect it any then and in future for our kids. Thanks.

  52. Based on this website, an attorney could help us to negotiate restitution down after probation is finished if victims agree. When I asked my attorney about that, he said he has never heard about it.
    May I know if there were any successful cases ?

    • There isn’t cases. These are situations where the victims, attorneys, flu and US attorneys office worked out a deal behind closed doors. Also DON’T forget, any restitution forgiven by the victim is taxable income, so be ready to hand of money to the IRS.

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