Bankruptcy Might Help You Get Your Driver's License Back If You Lost It For Financial Reasons

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financing options after bankruptcy

Some people think that after you file for bankruptcy that they won't be able to qualify for any sort of credit for many years. Is this true? Would it be possible to purchase a car with an auto loan or get a mortgage for a house? I put together this blog to provide others with the information that I have worked hard to find. As I started the bankruptcy process, I was very worried about what it meant for my financial future. Fortunately, I have recovered and have learned a lot along the way. Hopefully, this information will prove helpful for you.

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Bankruptcy Might Help You Get Your Driver's License Back If You Lost It For Financial Reasons

14 October 2015
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If you lost your driver's license for bouncing a check or failing to pay a traffic fine, child support, student loan, or court judgment, a bankruptcy filing may help you get your driver's license back. It does depend on the state laws where you reside and the reason your driver's license was suspended. Here are 5 examples of how a bankruptcy filing can help you get back on the road again, legally, and a few other things to consider before you file.

5 non-driving related reasons for suspended driver's licenses

Courts can suspend driver's licenses for financial reasons that may not be related to driving. Here are five examples and how filing for bankruptcy can help.   

  1. Bounced check. Bouncing a check can result in a suspension of your driver's license. In fact, a chairman of the U.S. House Judiciary Committee lost his driving privileges due to bouncing a check. In most states, a bounced check can be discharged in a bankruptcy. If you bounced a check because you are in dire financial straits and you lost your driver's license, you may want to consider filing for bankruptcy to get on track with your finances. A bonus in this situation would  be getting your license back.
  2. Traffic fine. If you lost your driver's license for failing to pay traffic fines, you won't be able to have the fines discharged in a bankruptcy. However, if you were unable to pay your fines due to having too much on your plate already with bills from creditors, a bankruptcy filing will help you eliminate or reduce those debts, which should make it easier for you to pay your traffic fines. By reducing the amount of debt you need to repay, you should be able to afford paying off the traffic fine and the attached court costs of the ordeal. 
  3. Child support. In most states, driver's licenses are suspended if you don't pay your child support obligations. What you owe in child support will not be discharged in a bankruptcy. However, as with traffic fines, a bankruptcy filing may make it easier for you to get caught up on your child support payments so your driver's license can be reinstated. Be aware that when the debt is repaid through a bankruptcy trustee, the trustee will make sure your child support obligations are taken care of before other debt is paid and before you are given your spending allowance. 
  4. Student loan. Defaulting on a student loan can cause you to lose your driver's license in 22 states. Unless you can prove that paying your student loan is a hardship, you cannot discharge them with bankruptcy. You'll need to hire a bankruptcy attorney in your state to see how to go about proving a hardship. Even if you cannot get the student loan discharge, a bankruptcy can still help by taking care of all the other debt you have so you'll have more money available to pay your student loan. 
  5. Court judgment. Failure to pay certain types of court judgments can result in the loss of your driving privileges. Most often, these types of judgments are related to personal injury lawsuits in which the individual did not have car insurance. A court judgment can be discharged in bankruptcy, which means you will be able to reinstate your driver's license after the court has received a letter from your attorney or trustee stating that the judgment debt was settled. 

Hire a bankruptcy attorney 

If you lost your driver's license for financial reasons, speak with a bankruptcy attorney to see if a bankruptcy can help you get behind the wheel again. 

When you meet with your bankruptcy attorney for the first time, you'll need to show him or her documents related to the reason why you lost your driving privileges, as well as all your financial records and information regarding your assets. The attorney will use this information to start processing your bankruptcy. Do not attempt to get your driver's license reinstated at the DMV until after your attorney has given you the 'go-ahead' to do so.