How to Get Your Driver’s License Back With a Chapter 7 Bankruptcy
Posted on Friday, February 20th, 2015 at 3:12 pm
Generally, an old debt costs someone their driver’s license in one of two ways.
- Drunk Driving Accident – A drunk driver hurts an innocent bystander and is assessed damages as a result. Debts related to drunk driving are not dischargeable in a Chapter 7, although you can set up a Chapter 13 bankruptcy to create a payment plan to pay the drunk driving debt off over time.
- Uninsured During an Auto Accident – Northern Kentucky drivers sometimes lose their licenses because they did not have automobile insurance at the time an accident occurred. If a Northern Kentucky driver causes an automobile accident and does not have insurance, the injured person will turn to his or her Uninsured Motorist policy for recovery. Let’s say the injured person has automobile insurance with State Farm, and State Farm has to pay $50,000 in Uninsured Motorist Coverage to the injured person. The injured person has now been compensated, but State Farm is out $50,000. State Farm won’t just eat that loss – they come after the uninsured driver in court. Often, the uninsured driver is unable to defend him- or her-self, and State Farm will get a judgment for the full $50,000. As a way of making sure the uninsured driver pays toward the judgment, the court will suspend the uninsured driver’s license.
You Can Get Your Driver’s License Back if You Were Not Involved In an Accident as a Drunk Driver
A debt from a judgment related to the personal injury of another person are completely dischargeable so long as the accident was not a result of drunk driving. Such a debt is considered “unsecured”, meaning that it is not attached to any personal property of the debtor unless the insurance company takes special measures (such as filing a judgment lien with the County Clerk). When a Northern Kentucky driver files a Chapter 7, all unsecured debts are discharged, and the driver owes no further obligation to the insurance company (in our example above, State Farm). Since the insurance company has no further right to collect on the debt, it cannot cause the driver’s license to be suspended any longer. In fact, if the insurance company would try to keep a hold on the driver’s license, it would be liable for damages as a violation of the automatic stay or the bankruptcy court’s discharge injunction.
File Now to Get Your Licence Back As Soon As Possible
Typically, a Chapter 7 bankruptcy takes about six months to complete when filed in the Northern Kentucky bankruptcy system. The insurance company releases the hold on that license during that time, usually within two to three months. Northern Kentucky drivers should not despair – with one simple phone call, you can get your driver’s license back and get rid of the debt that is holding you down!
If you or someone you know has lost their drivers license because they were uninsured at the time of their auto accident but not drunk, please contact Lawrence & Associates.
Contact Us (859.371.5997) for a Free Consultation