Chapter 7 Bankruptcy is an important tool that can get you a fresh start. But did you know that bankruptcy can help you get your driver’s license back here in California?
NOTE: Many people call my office not having read this entire post. This trick works only for civil judgements, NOT criminal restitution, unpaid child support, traffic tickets or parking tickets.
The DMV has the authority under California Vehicle Code section 16370 to suspend your driver’s license for the non-payment of certain auto-related judgement debts.
These types of debts are typically related to a car accident where the drive did not have insurance. California law requires that all drivers have the appropriate level of insurance to be on the road.
When a non-insured driver causes an accident and is later sued for damages, this can result in a judgement. If the person does not pay the judgement, the DMV can be notified. This will lead to the suspension of your driver’s license until you pay the judgement.
Most judgements are considered unsecured debts. All unsecured debts are wiped out (called a discharge in legal terms) in a Chapter 7 Bankruptcy. This means that even though you were sued and the state court ordered you to pay someone else, this debt will be discharged in your bankruptcy case.
Remember: Federal bankruptcy law prohibits any person or entity from taking collection activity against a person that has discharged their debts. Withholding a driver’s license against a person merely because they owe a debt can be considered a collection activity. Because Federal law trumps California law, the DMV can not hold up your driver’s license merely because you owe a debt from a car accident. Therefore, filing bankruptcy can help you get your driver’s license back.
Once your Chapter 7 Bankruptcy case is complete, you can contact the DMV to inform them that your judgement has been discharged. The DMV will ask for proof of insurance and some other paperwork. Once this paperwork is complete, the DMV will lift the 16370 hold on your license.
It is important to note that this process does not apply to judgement debts from DUI accidents. Bankruptcy law is clear that DUI-related debts are not discharged in a Chapter 7 Bankruptcy case.
If you need help filing bankruptcy to get your California Driver’s License back from the DMV, please contact my office. I can be reached at (916) 333-2222.