The United States Bankruptcy Appellate Panel for the Eighth Circuit recently released a decision affirming a lower federal bankruptcy court’s decision permitting a bankruptcy debtor to discharge a debt he owed to a county jail for incarceration costs as part of his Chapter 7 bankruptcy. Representatives of the county to which the debt was owed appealed the bankruptcy court’s ruling, but the appellate panel’s decision favored the debtor, holding that federal bankruptcy law allows the discharge of the debts. Based on the recent appellate ruling, the debt owed by the man for his incarceration costs will remain discharged, and he has no obligation to repay it.
The debtor in the case of County of Dakota v. Milan was a man who sought debt relief through a Chapter 7 bankruptcy proceeding in 2014. Among other debts and obligations, the debtor requested the discharge of a $3,500 debt that he owed to the appellant, the Dakota County Sheriff’s Office, for the costs of his 179-day incarceration at the Dakota County Jail. Like many jails and prisons throughout the country, the appellant charges inmates daily fees to contribute toward the expenses of their incarceration. During the initial bankruptcy proceedings, the court ruled that the unsecured debt owed to the appellant should be discharged, leading the Sheriff’s Office to file an appeal.