How to Get Back Your Drivers License by Filing Bankruptcy

If you are facing a judgment due to a motor vehicle accident, then you risk losing your drivers license if you fail to pay off the judgment. On the other hand, you can file a Chapter 7 or Chapter 13 bankruptcy and discharge (wipe out) that debt in order to retain your drivers license.

The State cannot discriminate against people on the basis of filing bankruptcy, and the suspension or loss of a drivers license would constitute a discriminatory act pursuant to Section 525 of the Bankruptcy Code.

Please note however that there is a discharge exception for drunk driving debts that resulted in personal injury or death to others. Those types of debts cannot be wiped out by filing bankruptcy. You should consult an attorney to discuss the facts and specifics of such a case if this applies to you.

A pattern that I have seen recently is for extremely old motor vehicle judgments to be brought up before the State Department of Transportation for a license suspension. If this is the case, your attorney will have to locate the old judgment to find out the name and address of that plaintiff, along with the motor vehicle insurance company. They will have to be listed on your bankruptcy schedules as potential creditors when you file your case.

Once the discharge order is granted by the Bankruptcy Court, then you or your attorney can contact the State Department of Transportation and you will need to pay the license renewal or reinstatement fee in order to resume your driving privileges.

If you have specific questions, please let me know!

8 Comments on “How to Get Back Your Drivers License by Filing Bankruptcy”

  1. Hello, I’m in California and filed my Chapter 13 petition as pro per, now before I did this I did extensive research concerning bankruptcy laws etc.. I have contacted DMV, LA superior courts regarding traffic tickets infraction that now have a civil money judgement the collection agency states that they are exempt, DMV & the courts are exempt so they do not have to comply, I explained and provided the information on The Automatic Stay concerning license suspension and that all action concerning debt collection has to ceased especially if my infractions does not violate the Social Security Act 466(a)16 Im out of gas not only is the ticket 6 years old but the ticket is included in my plan but I’m unable to get an abstract for reinstate my license, Have a missed something somewhere???

  2. Thanks so much for the info. I do have a fairly unique case in which I took it on as pro ser. I filed the Chapter 13 not realizing the major stump I faced with the LA Superior Courts. I have everything correctly filed it just the old ticket that was a speeding ticket came up that I didnt finish paying on so they say, and placed a hold on my License for a FTP failure to Pay 4 years later. After my trustee and I were a little puzzled on why the courts felt they are exempt from the stay a court clerk explained that usc title 11 sec 362 (b)(1) (b) The filing of a petition under section 301, 302, or 303 of this title, or of an application under section 5(a)(3) of the Securities Investor Protection Act of 1970, does not operate as a stay—  
    (1) under subsection (a) of this section, of the commencement or continuation of a criminal action or proceeding against the debtor;  
    is the exemption. So me being the sleuth I looked up the code and read further that the subsection A states the following: 
    (A) of the commencement or continuation of a civil action or proceeding—  
    (i) for the establishment of paternity;  
    (ii) for the establishment or modification of an order for domestic support obligations;  
    (iii) concerning child custody or visitation;  
    (iv) for the dissolution of a marriage, except to the extent that such proceeding seeks to determine the division of property that is property of the estate; or  
    (v) regarding domestic violence;  
    I further found that they stay in not valid for section D which reads (D) of the withholding, suspension, or restriction of a driver’s license, a professional or occupational license, or a recreational license, under State law, as specified in section 466(a)(16) of the Social Security Act;  
    *this act states that the failure to pay child and or spousal support which results in License suspension* 
    My tickets which is all monetary and no community service does not fall under any of the exemptions. Maybe I’m grasping for straws but I further found a case study which is very interesting take a look I would like to hear your opinion.  

  3. My son had a 20 year judgment issued against his driver’s license for not having insurance in 2000. He needs to get a license now in order to work but after spending 10 years in prison for having a low blood sugar and running a red light and killing the grandson of a sheriff, been type 1 diabetic since the age of 6; 
    he is indigent. Will bankruptcy erase this judgment 

  4. Hi shawn im considering filing bankruptcy . I have a motor vehilcle judgment from over 10 years ago. My credit report is horrible . I just want this to go away. What shouod I do.

  5. My dl is suspended because am insurance company is after me for thousands for an uninsured crash noo.e was hurt but my only income is child support so I should be exempt and get my dl back but how do I do that

  6. My response is that depending on the amount of the judgment, you should definitely look into filing a Chapter 7 bankruptcy to wipe out the motor vehicle judgment. This is sometimes the quickest way to get your license back. I had a case recently in which there was a motor vehicle judgment, but we were required to file a Chapter 13. Wouldn’t you know it, but the insurance company with the judgment never bothered to even file a claim for their judgment. Thus, my client didn’t have to repay the judgment amount, and immediately got his license back. Take care, Shawn Wright

  7. I received a chapter 7 discharge February 2014 because I had a civil (not DUI related and creditor was listed on petition and discharged) in pa that suspended my license. I sent the petition and discharge order to pa dot and they refuse to accept it. Now someone told me the bankruptcy is useless because a lien avoidance was not filed. And the atty who filed for me knew this the main reason for filing and is not returning my calls. Anyone have this problem?

  8. Lora, you can still reopen the Chapter 7 case and file the lien avoidance action. The Bankruptcy Courts in Pennsylvania have very liberal policies with respect to reopening bankruptcy cases. Good luck, Shawn Wright

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