The Bankruptcy Appellate Panel for the Eighth Circuit held on February 5, 2013 that a Missouri bankruptcy court was correct in concluding prison officials did not violate a discharge injunction by collecting money from a prisoner’s account for incarceration costs that accrued after the injunction was filed.
Missouri prisoner Zachary A. Smith became subject to an $87,830.13 judgment under the Missouri Incarceration Reimbursement Act (MIRA) on January 20, 2009, for the costs of his incarceration through March 26, 2007. The state of Missouri was also granted a judgment for reimbursement costs accruing after March 26, 2007 through Smith’s release from prison – which is unlikely since he is serving life without the possibility of parole. The judgment further allowed the state to collect 90% of all deposits to Smith’s prison account, excluding wages and bonuses earned while incarcerated.
Smith filed a Chapter 7 bankruptcy petition on September 14, 2010 and received his discharge on March 11, 2011. In September 2012, the state seized a $45.00 deposit to Smith’s prison account pursuant to the MIRA judgment. He then filed a motion for contempt with the bankruptcy court, claiming the state had violated the discharge injunction. The bankruptcy court agreed that the MIRA judgment was void with respect to all costs accrued as of the bankruptcy filing, but held the judgment remained valid as to future reimbursement costs and that the costs incurred by the state since Smith’s bankruptcy petition were not dischargeable debts.