If you have lost your driver’s license due to an accident and didn’t have insurance, filing bankruptcy can solve the problem.
The bankruptcy discharge rules (statutes) are written so that generally EVERYTHING is wiped out or discharged UNLESS there is an exclusion specifically mentioned. There are several exceptions to debts that are not discharged with a bankruptcy and they may be found generally at 11 U.S.C. § 523 (and a few other places). So, a bankruptcy attorney starts out with the presumption that all debts are discharged unless they are on the “list” of exceptions.
So, applying the knowledge that all debts are discharged in a bankruptcy unless specifically excluded, you need to read 11 U.S.C. § 523 like this:
I can file bankruptcy in Omaha, Nebraska and wipe out my debts related to the automobile accident unless……………….there is some exception.
There IS an exception but it is very limited. Here is what 11 U.S.C. § 523 (a)(9) says:
(9) for death or personal injury caused by the debtor’s operation of a motor vehicle, vessel, or aircraft if such operation was unlawful because the debtor was intoxicated from using alcohol, a drug, or another substance;
You got it……UNLESS the accident was caused by drunk driving or some other drug, then your debt to everyone involved in the auto accident will be discharged if you file a bankruptcy. This discharge rule applies to Chapter 7 and Chapter 13 bankruptcy petitions. And, once the bankruptcy petition is filed with the court, the Department of Motor Vehicles will remove its administrative hold on your license. You will be allowed to apply for a new driver’s license after paying a small filing fee to the State. What is even better is that you can get your license back immediately after filing the bankruptcy; you don’t need to wait until it is approved!
However, your bankruptcy attorney must know exactly the right steps to take in preparing your bankruptcy schedules in order to make things work smoothly. If not done absolutely right, your ability to get your driver’s license back will be denied!!! For example, if you fail to list all passengers in every vehicle involved in the accident….including your own, the State will NOT reinstate your license. Also, you need make sure that the proper State agency is listed on your bankruptcy petition so that they get notice. Finally, you need to list all insurance companies that may be involved because they will likely have subrogation rights to collect from you if they paid their customer money.
As a bankruptcy attorney practicing in Omaha, Nebraska since 1989, I have seen MANY instances where things weren’t done correctly and the debtor in bankruptcy did not get their driver’s license back! I have been hired to “fix” theses problems after the fact on more than one occasion. What is worse is that several years might go by before you know there is a problem. For example, let’s say that you hadn’t lost your driver’s license before you filed bankruptcy. Rather, you simply received a letter from the insurance company indicating that you are liable for damages caused by the accident. Subsequently, you meet with a bankruptcy attorney in Omaha and proceed to actually file a case to wipe out this debt because it is very large. Well……if not done properly, your bankruptcy will go through just fine BUT the State of Nebraska (as well as any other state) may still SUSPEND YOUR LICENSE because your bankruptcy petition was deficient! So, even though you filed a bankruptcy and even though you did mention the accident on the bankruptcy petition, if every party that could have possibly had anything to do with the accident is not properly listed and notified during the proceeding…….then your license is still suspended!
Getting your driver’s license back (or preventing it from being suspended in the first place) due to an accident and the lack of insurance is normally something that bankruptcy can fix. But, as with everything else in the bankruptcy world, details matter!