19.2Incarceration for Failure to Pay Court-Ordered Financial Obligations: Determination of Ability to Pay

Before incarcerating a defendant for failure to pay a court-ordered financial obligation, the court must determine the defendant’s ability to pay without manifest hardship. MCR 6.425(D)(3) provides:

“(3) Incarceration for Nonpayment.

(a)   The court shall not sentence a defendant to a term of incarceration, nor revoke probation, for failure to comply with an order to pay money unless the court finds, on the record, that the defendant is able to comply with the order without manifest hardship and that the defendant has not made a good-faith effort to comply with the order.

(b)   Payment alternatives. If the court finds that the defendant is unable to comply with an order to pay money without manifest hardship, the court may impose a payment alternative, such as a payment plan, modification of any existing payment plan, or waiver of part or all of the amount of money owed to the extent permitted by law.

(c)   Determining manifest hardship. The court shall consider the following criteria in determining manifest hardship:

(i)   Defendant’s employment status and history.

(ii)   Defendant’s employability and earning ability.

(iii)   The willfulness of the defendant’s failure to pay.

(iv)   Defendant’s financial resources.

(v)   Defendant’s basic living expenses including but not limited to food, shelter, clothing, necessary medical expenses, or child support.

(vi) Any other special circumstances that may have bearing on the defendant’s ability to pay.”

The court must comply with the provisions of MCR 6.425(D)(3) before revoking probation or sentencing a probationer to prison or jail for failure to pay a court-ordered financial obligation. See MCR 6.425(D)(3)(a); MCR 6.445(G). Under MCL 780.766(11) and MCL 769.1a(11), “the defendant’s ability to pay is considered when deciding whether a defendant’s probation or parole should be revoked because of a failure to pay.” People v Neilly, ___ Mich ___, ___ (2024) (holding that the trial court did not violate “federal and state prohibitions on ex post facto laws when, during defendant’s resentencing proceedings, it ordered defendant to pay restitution pursuant to the current restitution statutes rather than the statutes in effect at the time of defendant’s crimes” because “restitution is a civil remedy and not punishment”). “The restitution statutes also allow a defendant to repay restitution in the form of services, if the victim consents, providing the defendant greater flexibility in resolving the restitution order.” Id. at ___, citing MCL 780.766(6) and MCL 769.1a(6). “The statutes also allow the defendant to petition the trial court to modify the method of payment in cases of undue hardship.” Neilly, ___ Mich at ___, citing MCL 780.766(12) and MCL 769.1a(12).

A court must also comply with MCR 6.425(D)(3) before sentencing a person to a term of incarceration for nonpayment in a proceeding under MCR 3.606 for contempt of court. MCR 3.606(F).¹