Arizona Bankruptcy Law - Fines & Penalties
11 U.S.C. 525 provides (7) to the extent such debt is for a fine, penalty, or forfeiture payable to and for
the benefit of a governmental unit, and is not compensation for actual pecuniary loss, other than a tax penalty -
(A) relating to a tax of a kind not specified in paragraph (1) of this subsection; or (B) imposed with respect
to a transaction or event that occurred before three years before the date of the filing of the petition.
In Practice
"Governmental Unit" includes federal, state, county, city, and taxing districts. Any fine imposed under color
of law will not be discharged as a matter of public policy. In addition, courts often reciprocate reporting
appearance dates for individuals who are subject to arrest for non-payment of fines.
The Federal process of filing necessarily incorporates state law requirements. These state law requirements are
set forth in statutes, rules and case law opinions which frequently alter the operation of law. As a result of
these precedents, Arizona bankruptcy cases are unique to the state, as well as unique to each individual who
files. All alternatives provided by law may not be available because of differing individual financial histories
or prior case filings.
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