Yes, in certain limited cases filing a chapter 7 bankruptcy can get you back your California driver’s license.
Here’s how.
California law mandates that anyone driving must have auto insurance. If you are involved in an auto accident you can be sued for damages. If the other party gets a civil judgment against you, they will then seek to enforce that money judgment. As part of their collection efforts they will notify the California Department of Motor Vehicles. Under California Vehicle Code section 16370 the DMV has authority to suspend your driver’s license for the non-payment of auto-related debts.
Most civil judgments are considered to be unsecured debts by the Bankruptcy Court. And a Chapter 7 bankruptcy can erase all unsecured debts.
Federal Bankruptcy law prohibits a creditor from taking any action to collect a debt that has been discharged in bankruptcy. This suspension of your driving privileges is considered to be a collection activity. Because Federal law is more powerful that California state law, the DMV can no longer withhold your driver’s license because of your failure to pay the debt from your auto accident.
When your bankruptcy case is discharged, you can take a certified copy of your bankruptcy discharge to the DMV and show them that this debt has been discharged. You will also need to bring your proof of auto insurance and a reinstatement fee. You’ll soon be on the road again with a valid California driver’s license.
That’s how filing a Chapter 7 bankruptcy can help you get your California driver’s license back.
BUT BEWARE
This tactic only works for civil judgments.
If the DMV suspended your driver’s license for:
- DUI
- Failure to pay traffic tickets
- Failure to pay child support
- etc.
this tactic will not work.
These types of debts are regarded as criminal fines and penalties and can not be discharged in a bankruptcy.
If . . . and only if . . . your California driver’s license was suspended because you were involved in an uninsured auto accident which you are unable to pay, then perhaps a Chapter 7 bankruptcy is the answer for you.
Perhaps you have some questions. You can reach my by phone at 760-523-9090. Or just click on the ORANGE “Contact Me” button at the top of your screen. I’ll contact you back and make arrangements to meet with you.
Talk with me. I’ll treat you like a friend.