Can I Use Bankruptcy to Get My Driver’s License Back?

You may not know it, but Minnesota law allows creditors to suspend a person’s driver’s license for unpaid judgments arising out of car accidents while uninsured.

So can bankruptcy can help you get your driver’s license back after it has been suspended?

The short answer is yes.

Here’s what you need to know.

WHEN CAN MY DRIVER’S LICENSE BE SUSPENDED FOR AN UNPAID JUDGMENT?

Not just any judgment creditor can suspend your license.

For example, if your credit card company gets a judgment against you because you didn’t pay off a credit card, they cannot suspend your driver’s license. They can garnish your wages and levy your bank accounts, but they cannot suspend your license.

The only type of judgment that allows a creditor to suspend your license is a judgment for personal injury or property damage caused while the defendant did not have car insurance.
If someone sues you for a car accident and you didn’t have car insurance, then the person who sued you can ask Minnesota Driver and Vehicle Services (DVS) to suspend your license.

What happens next?

DVS must give you 2 weeks of notice before the suspension starts. This notice will come in the mail.

You can request a hearing if you have evidence that the suspension was unjust.

Good evidence for this would be:

Proof that you had insurance at the time of the accident
Proof that satisfied or paid off the judgment

HOW LONG DOES THE SUSPENSION LAST?

The suspension lasts until you satisfy the judgment

There are two ways to satisfy the judgment:

Pay it off
File bankruptcy

Unfortunately, the most common reason that people drive without insurance is that they don’t have enough money to pay the insurance premiums.

Someone who cannot afford a $50 monthly insurance premium probably does not have money to pay a judgment for $10,000 or more.

CAN I GET MY LICENSE BACK?

Either a Chapter 7 bankruptcy or Chapter 13 bankruptcy will allow you to get your drivers license back as soon as it is filed – you do not have to wait until the bankruptcy is finished and you get the discharge order

Additionally, if you are in the two-week period after DVS has given you notice of the suspension, then you can prevent the suspension from ever happening by filing a bankruptcy.

Why?

When I have spoken with DVS about stopping the suspension or getting the license reinstated they have been very friendly.

They don’t want people to be forced to suspend anyone’s license. After all, people need a driver’s license to get to work in order to pay the judgment.

What good is served by making it harder for someone to get to work?

Suspending the license also increases the likelihood that people will drive without a license, which isn’t good for anyone.