Filing Bankruptcy Can Stop A Driver’s License Suspension In Some Cases

Whether bankruptcy can stop a driver’s license suspension largely depends on the reason for the suspension. Bankruptcy can address certain financial obligations that might lead to a license suspension, but it won’t cover all scenarios. Here’s a breakdown of how bankruptcy might impact a driver’s license suspension:

1. Suspensions Due to Unpaid Judgments:

• If your driver’s license is suspended due to unpaid judgments from a car accident while you were uninsured, filing for Chapter 7 bankruptcy might help. Discharging the debt associated with the judgment in bankruptcy can potentially lead to reinstatement of your license, as the underlying debt causing the suspension is eliminated.
• It’s important to note that you would need to take additional steps post-bankruptcy to get your license reinstated, which might include providing proof of the bankruptcy discharge to the licensing agency and possibly paying a reinstatement fee.

2. Suspensions for Other Reasons:

• If your license is suspended for reasons not related to dischargeable debts (such as DUI/DWI, reckless driving, or accumulating too many points on your driving record), bankruptcy will not help in reinstating your license. These suspensions are administrative or punitive actions unrelated to financial debts that can be discharged in bankruptcy.

3. Child Support and Alimony:

• If your license is suspended due to non-payment of child support or alimony, filing for bankruptcy won’t help. These types of debts are considered non-dischargeable in bankruptcy, and you’ll need to address the arrears directly to have any chance of license reinstatement.

4. Chapter 13 Bankruptcy:

• Filing for Chapter 13 bankruptcy creates a repayment plan that might include debts leading to a license suspension. While this won’t immediately clear the debt, it can provide a pathway to eventually getting your license reinstated as you make progress on your repayment plan.

5. Immediate Steps to Take:

• If you’re considering bankruptcy due to a license suspension, consult with a bankruptcy attorney to understand how filing might affect your specific situation.
• You should also communicate with the department of motor vehicles or the equivalent agency in your state to understand the requirements for reinstating your license, as there might be additional steps or fees involved.

Bankruptcy can be a tool to address certain financial issues leading to a driver’s license suspension, particularly when the suspension is due to unpaid judgments related to debts that can be discharged. However, it’s not a universal solution for all types of license suspensions, especially those related to non-financial punitive reasons. Consulting with legal professionals can provide clarity on whether bankruptcy is a viable option for your situation and what other steps you might need to take to reinstate your driver’s license.

Driver’s License Suspensions