Kelly v. Robinson

In 1980, Carolyn Robinson (debtor) pleaded guilty to second-degree larceny based on her wrongful receipt of nearly $10,000 in welfare benefits from the state of Connecticut (the state) (creditor). Robinson was sentenced to five years’ probation and ordered to make monthly restitution payments of $100 to the state from January 16, 1981, until the end of her probation period. In February 1981, Robinson filed a Chapter 7 bankruptcy petition and listed her restitution obligation as a debt. The bankruptcy court notified the state income-maintenance agency and probation office of the deadline for filing objections to the discharge of Robinson’s restitution debt, but neither agency filed proofs of claim or objections to discharge. In May 1981, the bankruptcy court granted Robinson a discharge of the restitution debt. At the time, Robinson had paid only $450 in restitution. Robinson made no further payments to the state following the discharge. Nearly three years later, the state probation office notified Robinson that it considered the restitution obligation nondischargeable. Robinson commenced an adversary proceeding against the state in bankruptcy court, seeking (1) a declaration that her restitution obligation had been discharged and (2) an injunction prohibiting state officials from forcing her to make restitution payments. The bankruptcy court found that the 1981 discharge had not altered the conditions of Robinson’s probation, reasoning that the restitution obligation was not a debt for purposes of the Bankruptcy Code and thus could not be discharged. The district court affirmed, but the Second Circuit reversed, holding that a restitution obligation imposed as a condition of probation was a debt and that Robinson’s specific debt was dischargeable. The United States Supreme Court granted the state’s petition for certiorari.