Steadily burn it - deflating the currency that remains in circulation, everyone will get richer automatically, as their dollars will be progressively more valuable.

The rest is used to pay the debts, the payments that flow to the RICO parties are added to the pile to be burned (while the innocent holders of that debt still receive their due, like your pension fund)

All automatic and all you will notice is the price of goods falling, and your taxes falling as-well since they are not needed any longer to pay the debt - that is getting paid from the pile seized.

At least, this is what I hope happens.. a nice smooth improvement in life.