The Extraordinary Tools of Bankruptcy: Reinstating Your Driver’s License for Unpaid Traffic Tickets

Whether you can get your license back depends on what traffic law(s) you violated when you got the ticket(s).

 

The last blog post showed how filing a bankruptcy case will reinstate your suspended driver’s license if that suspension came from not paying a court judgment from an uninsured motor vehicle accident. If you owe a debt that turned into this kind of judgment, that debt can be legally written off (“discharged”) through bankruptcy in most situations. As a result, you can get back your driver’s license.

Similarly, if your license was suspended for not paying traffic tickets, a bankruptcy will often discharge what you owe on those tickets, enabling your license to be reinstated. Today’s blog post explains how you get your license back in this particular situation.

Only Chapter 13 Works

Chapter 7, often called “straight bankruptcy,” can’t be used for this purpose because it cannot discharge “a fine, penalty, or forfeiture payable to and for the benefit of a governmental unit.” See Section 523(a)(7) of the federal Bankruptcy Code.  A debt owed for a traffic ticket is a “fine” or “penalty” “payable to and for the benefit of” the state, city or other local “governmental unit” whose police gave it to you. Since Chapter 7 won’t discharge traffic tickets, it can’t help you reinstate your driver’s license resulting from such tickets.

But Chapter 13, the “adjustment of debts” type of bankruptcy, does NOT exclude “a fine, penalty, or forfeiture payable to and for the benefit of a governmental unit” from discharge. See Section 1328(a)(2) of the Bankruptcy Code, which lists some but not all of the kinds of debts that Chapter 7 cannot discharge, specifying which of those also cannot be discharged under Chapter 13. The one referred to in the above paragraph—Section 523(a)(7)—is clearly NOT on the list of those that cannot be discharged under Chapter 13.  Since Chapter 13 will discharge traffic tickets, it can enable you to reinstate your license.

Traffic Crimes vs. Violations or Infractions

The traffic ticket(s) at issue must be not be for a crime—usually labeled a misdemeanor or felony. It must instead be for a traffic violation or infraction.

Chapter 13 specifically excludes from discharge “any debt… for restitution, or a criminal fine, included in a sentence on the debtor’s conviction of a crime.” So if the reason for suspension of your license was for breaking a traffic law that resulted in you being required to pay restitution or a criminal fine, such restitution or fine would not be discharged in bankruptcy, thereby not enabling your license to be reinstated.

But this key difference between a non-criminal and criminal fine is not always clear.  None of these terms are defined in the Bankruptcy Code. The distinction can turn on the arbitrariness of the words used in your state’s statutes or your local jurisdiction’s ordinances.

Also, some types of violations of law can be EITHER a dischargeable violation/infraction or a nondischargeable misdemeanor/felony depending on the seriousness of the offense or some other factor. For example, if you receive a traffic ticket for driving while your license was suspended, whether that is a non-criminal offense or a criminal one could turn on the reason for—and seriousness of—the original suspension.

Similarly, the more serious a violation of the traffic laws, the more likely that violation would be considered criminal. Common examples of relatively serious violations that would likely be considered criminal are reckless driving, hit and run, and attempting to elude arrest.

License Reinstatement Procedure

Under Chapter 13, the discharge of your debts occurs at the end of the 3-to-5 year case. But how quickly your license can be reinstated—including whether it will have to wait until the discharge–greatly depends on local procedures.

Be aware that there are a number of authorities involved—the state or local court under whose jurisdiction the traffic fine was imposed, the state motor vehicles department which issues/suspends/reinstates your license, and the bankruptcy court which discharges the traffic fine (or cannot do so if it is considered a criminal fine or restitution).

Your attorney will, first, be able to tell you whether you will be able to reinstate your license, and second, be familiar with the applicable policies and practices of each of the authorities so that, in circumstances when your license can be reinstated, it will happen as quickly and smoothly as possible.

 

Call Now ButtonCall Now