Introduction: Get Back Behind the Wheel
Is your suspended driver’s license causing stress and limiting your ability to get to work, school, or care for your family? The good news is that bankruptcy might offer a path to reinstate your license, depending on the circumstances of the suspension. By addressing the debts tied to your suspension, you can get back on the road and back to your life.
In this guide, we’ll break down how bankruptcy could help you, the types of debts that are dischargeable, and what steps to take next.
Reclaim Your Driver’s License Through Bankruptcy: What You Need to Know
The Supreme Court Ruling That Works in Your Favor
In 1971, the U.S. Supreme Court’s decision in Perez v. Campbell reinforced that if the debt causing a license suspension is discharged in bankruptcy, the license reinstatement cannot be denied under federal law.
This legal precedent means that bankruptcy offers relief for many debt-related suspensions—putting you one step closer to driving again.
What Debts Can Be Discharged to Reinstate Your License?
Dischargeable Debts: A Fresh Start for Drivers
If your license suspension stems from debts incurred during a car accident, there’s a strong chance bankruptcy could help. Examples of dischargeable debts include:
- Personal property damage from an accident.
- Personal injury claims tied to the accident.
- Debts related to driving while uninsured or underinsured.
When these debts are discharged, the financial barrier to reinstating your license is removed.
Non-Dischargeable Debts: When Bankruptcy May Not Help Directly
Not all debts tied to a suspension are eligible for discharge under bankruptcy laws. Examples include:
- Fines or penalties resulting from traffic or parking infractions.
- Criminal charges such as DUI-related damages or injuries.
- Intentional acts causing injury or damage (e.g., a malicious act).
If your suspension falls under these categories, bankruptcy won’t automatically reinstate your license, but it can still help in other ways.
What If Your Debt Isn’t Dischargeable?
Freeing Up Income to Pay Fines or Penalties
Even if bankruptcy doesn’t directly resolve the debts causing your suspension, it can still provide significant relief. By discharging other debts, like credit card balances or medical bills, you can free up income to pay fines, fees, or penalties necessary to reinstate your license.
Example: How Bankruptcy Could Indirectly Help
Imagine you owe $5,000 in traffic fines and $20,000 in credit card debt. While the fines aren’t dischargeable, eliminating the credit card debt through bankruptcy could allow you to allocate your freed-up funds to settle the fines and get your license back.
Steps to Reinstating Your License Through Bankruptcy
- Evaluate Your Debt
- Determine whether the debt causing your license suspension is dischargeable under bankruptcy laws.
- Review other outstanding debts to see how bankruptcy might improve your overall financial situation.
- Consult an Experienced Bankruptcy Attorney
- Our office can assess your specific situation, advise whether bankruptcy can help with your suspension, and guide you through the process.
- File for Bankruptcy if Appropriate
- Chapter 7 bankruptcy is typically the fastest way to address dischargeable debts.
- Chapter 13 bankruptcy might be necessary if you have income or assets to protect and need to pay back non-dischargeable fines over time.
- Follow Through on Court Requirements
- Provide all necessary documentation to prove your eligibility for discharge.
- Work with your attorney to ensure creditors and licensing authorities are notified.
Get Back in the Driver’s Seat
Having a suspended license doesn’t have to mean being stuck. Bankruptcy offers an effective solution for many debt-related suspensions and can free up resources to address non-dischargeable obligations. Every situation is unique, so getting personalized advice is key.
Questions for Readers: Share Your Thoughts
- Are you facing a driver’s license suspension due to debt?
- Are you curious whether bankruptcy could help with your financial struggles?
- What’s holding you back from exploring bankruptcy as an option?
Take Control of Your Situation Today
Don’t let a suspended driver’s license hold you back any longer. Contact our experienced bankruptcy attorneys for a free consultation to explore your options. Whether you’re seeking dischargeable debt relief or looking to free up income, we’re here to guide you every step of the way.
Take the first step toward financial freedom and driving again—call us today!
