Evaluating Ability to Pay

Today’s post considers when a court should—and sometimes must—evaluate a defendant’s ability to pay a monetary obligation in a criminal case.

The statutes governing different monetary obligations vary in their approach to evaluating a defendant’s ability to pay at the point of imposition. For example, the restitution statutes expressly require the court to consider the defendant’s ability to pay before imposing restitution. The law even gives some guidance on what factors the court must consider, saying the judge “shall take into consideration the resources of the defendant including all real and personal property owned by the defendant and the income derived from the property, the defendant’s ability to earn, the defendant’s obligation to support dependents, and any other matters that pertain to the defendant’s ability to make restitution.” G.S. 15A-1340.36. The court may discount the restitution amount and order partial restitution “when it appears that the damage or loss caused by the offense is greater than that which the defendant is able to pay.” Id. (Remember that “may,” because I’ll come back to it at the end of the post.)

The fines statute is more permissive, but less specific. It says the court “should consider the burden that payment will impose in view of the financial resources of the defendant,” G.S. 15A-1362(a), but offers no specific criteria for consideration. Other cost and fee statutes don’t include an express requirement to consider ability to pay, but they of course include provisions for waiver and exemption. In context, the obvious idea behind those provisions is that the court will use them for defendants who cannot pay.

On the back end—by which I mean at a probation violation hearing, show-cause hearing, or other review hearing where the issue is the defendant’s nonpayment of the obligation—a judge has both a statutory and constitutional obligation to consider a defendant’s ability to pay before incarcerating him or her for not paying. Under G.S. 15A-1364 (which is incorporated by reference into G.S. 15A-1345(e) for probation violation hearings), the court must give a nonpaying defendant an opportunity to show “an inability to comply and that his nonpayment was not attributable to a failure on his part to make a good faith effort to obtain the necessary funds for payment.” Notwithstanding that awkward triple-negative (nonpayment—not attributable—to a failure), the general idea is pretty straightforward: a person cannot be incarcerated for a good-faith inability to pay.

The official commentary to the statute makes clear that it was written to give effect to the underlying constitutional rule: “This section is intended to respond to the demands of Tate v. Short, 401 U.S. 319 (1970), holding unconstitutional the imprisonment of a defendant who does not pay his fine because he is unable to.” The leading case nowadays is Bearden v. Georgia, 461 U.S. 660 (1983), in which the Court emphasized that a court must consider a person’s ability to pay and alternatives to imprisonment before revoking him or her for nonpayment. (The rule from Bearden clearly applies only on the back end, as the Court was careful to say that “[a] defendant’s poverty in no way immunizes him from punishment,” and “nothing we now hold precludes a judge from imposing on an indigent, as on any defendant, the maximum penalty prescribed by law.” Id. at 670.) The burden to demonstrate an inability to pay is on the defendant. State v. Tate, 187 N.C. App. 593 (2007).

Just because a court is required to consider a person’s financial situation when imposing restitution does not mean that the judge must actually reduce the amount assessed. In State v. Hillard, __ N.C. App. __ (2018), for example, the court of appeals upheld a restitution order in excess of $10,000 for a defendant with an estimated ability to pay $50 per month when the trial judge had carefully considered the defendant’s financial situation, including housing, food, employment prospects, support obligations, and medical bills. Other cases do, however, show that there is a point where even careful consideration of the defendant’s financial circumstances will not save a restitution award that clearly exceeds the bounds of common sense. In State v. Hayes, the court of appeals vacated a $200,000 restitution order for a defendant who earned $800 a month working at Harris Teeter, was deaf, lived with his mother, had recently completed bankruptcy proceedings, and had serious medical problems, including a brain tumor. 113 N.C. App. 172, 174–75 (1993) (“While we applaud efforts to alleviate the harm done to crime victims, we hold that the trial court erred in conditioning probation on an amount of restitution the defendant clearly cannot pay.”).