Bankruptcy Reset Button for Debt-Related Driver’s License Suspension

About 1.2 million Floridians face debt-related driver’s license suspension on an annual basis, and about 89 percent of these driver’s license suspensions have absolutely nothing to do with unsafe driving. 

Having your license suspended is a surefire way to upend your life. You can’t get to work, can’t get the kids to daycare or other activities, can’t get to the doctor, or pick up the groceries. 

It’s one thing to have your license suspended for a traffic infraction, but it’s another to lose it because of something that has nothing to do with the operation of a motor vehicle. Heck, a license can be suspended for people who don’t even have licenses yet! Underage tobacco use, truancy, and marijuana possession can pull your license even before it’s been issued. Even a civil judgment in collection can be used to yank your license.

Suspension of license and registration.— Florida Statute 324.121

The department, upon the receipt of a certified copy of a judgment, as provided in s. (1) 324.111, shall forthwith suspend the license and registration and any non-resident’s operating privilege of any person against whom such judgment was rendered, except as hereinafter otherwise provided in this section, and in s. 324.141.

Reasons behind a driver’s license suspension

As the law currently stands, the state suspends a person’s driver’s license indefinitely if a resident misses a payment on a court-issued debt, including unpaid criminal court fines and fees. Florida lawmakers introduced legislation in February 2021 to reform the driver’s license suspension practices. Rep.  Chip LaMarca (R-Broward) and Sen. Tom Wright (R-New Smyrna Beach) filed legislation in the Florida House and Senate to make Florida the 14th state to pass legislation reducing driver’s license suspensions because of unpaid court-issued debt. 

The legislation would standardize the process for Florida residents who owe fees and fines to apply for and receive an affordable payment plan and end driver’s license suspension when the underlying basis is overdue fees and fines owed in non-driving related criminal cases. That being said, the bills will not change any suspensions based on overdue child support or dangerous driving.

“Far too many Floridians are without the ability to pay their owed fines and fees in full,” Sen. Wright told the Fines & Fees Justice Center. “Suspending licenses for non-driving related offenses limits the person’s ability to work and earn wages to pay for the fines and fees. I am proud to sponsor this important piece of legislation at such a crucial time for so many of our Florida citizens.”

About one in eight drivers in Florida, or 2 million Florida residents, currently have a suspended driver’s license because they could not afford to immediately pay their fee or fine in full. Luckily, 13 U.S. states, including West Virginia, Montana, Mississippi, and Idaho, have passed similar legislation to reduce debt-based driver’s license suspensions.

“When someone loses their driver’s license, it becomes nearly impossible to maintain employment and support their family,” Rep Chip LaMarca told the Fines & Fees Justice Center. “As we build back our economy, we need to look at all options for Floridians and I believe that we should stop suspending licenses due to court debt.”

Reinstating your license

Until Florida has reform and updated legislature, there are not a lot of ways to reinstate your license when you have no money. However, if you are in dire financial straits and unable to pay your debts, it might be time to wipe the slate clean and file for Chapter 7 or 13 bankruptcy. I know that a lot of people regard bankruptcy as the b-word, but it is the same as any other legal resort. It’s there when you need it, and you could end up getting your license back.

How?

In different ways. First you need to know that fines themselves can’t be discharged in bankruptcy. Not can child support payments.

Then why file?

The role of Chapter 7 and Chapter 13 bankruptcy

The court puts an automatic temporary stay on your current debts when you file for a Chapter 7 personal bankruptcy. This automatic temporary stay keeps creditors from garnishing your wages, collecting payments, repossessing property, foreclosing on your home, turning off your utilities or evicting you. The court will then legally possess your property and select a bankruptcy trustee to oversee your bankruptcy case.

The role of the trustee is to review your assets and finances and oversee your Chapter 7 bankruptcy case. The trustee will sell specific property that the bankruptcy won’t let you keep, known as nonexempt property, and use the proceeds of the sale to pay back your creditors. They will also arrange and run a meeting between you and your creditors, known as a creditor meeting. During this meeting you go to the courthouse and answer questions about your bankruptcy filing.

At the end of the Chapter 7 bankruptcy process, about four to six months after your initial filing, the bankruptcy court will discharge your remaining debts, which means that you no longer need to pay them back. That being said, there are some debts that are not dischargeable through bankruptcy, including alimony, court fees, child support, most student loans, and some tax debts.

A Chapter 7 bankruptcy can wipe out specific debts within a matter of months, but a trustee appointed by the court can sell your nonexempt property to pay back your creditors. You also need to have a low income in order to qualify for a Chapter 7 bankruptcy. 

A Chapter 13 bankruptcy enables you to keep all of your stuff and get on an affordable repayment plan to pay back your creditors. You need to have enough money in order to afford the creditors’ payments, and you also need to stay below the maximum total debt limits, which are currently about $400,000 for unsecured debts and over $1 million for secured debts.

A court will approve the Chapter 13 repayment plan, and this plan typically lasts about three to five years. Your trustee will collect all of your payments and send them to your creditors. After you finish the repayment plan, the rest of the unsecured debts are discharged.

If you are in this level of financial trouble, I urge you to come in for a free consultation. Make an appointment and let’s see what we can do about getting you out of this kind of jam and back into traffic jams – just like every other South Floridian.