Really? I Can Do That With A Bankruptcy?
Most people are aware that they can use a bankruptcy to prevent a foreclosure or to keep a car from being repossessed. They are also aware that bankruptcy is great for getting rid of debt that cannot be paid such as deficiencies from repossessed cars and houses, huge medical and credit card debt and other such situations that people would consider “in the norm.”
It may really shock people to find out that a person can get their suspended driver’s license back when they file bankruptcy in some situations. This is the common scenario that can happen: A person has been having real problems financially. They decide that in order to put food on the table, they need to skip a car insurance payment. The car insurance is cancelled. Well, of course there has to be an accident once the insurance is cancelled. That is the theory of Murphy’s Law— “Anything that can go wrong, will go wrong” Worse, the accident is that person’s fault. So, they have a bill for about $22,000 they have to pay. They are responsible for the damages to the other automobile and the medical debt, if any. The insurance company for the other party will do two things. They will sue the person who caused the accident and then report to the State of Texas that there is no insurance. The State of Texas will suspend the Driver’s License for failure to be financially responsible for their actions. Yes, the person should have had the insurance, but sometimes life happens and bad things really do happen to very good people.
That person can certainly file bankruptcy to eliminate the $22,000 in debt. What many people do not realize is that filing bankruptcy will also lift the suspension of the driver’s license (if no alcohol is involved) as well! The reason is fairly simple. The license was lost because the person failed to be responsible for the debt and the suspension is in place until the debt is satisfied. As bankruptcy will eliminate the debt, the debt is then satisfied and there is no legal reason for a suspension to remain in place.
Bankruptcy can do other things as well. In a recent case filed, the owner of a club was behind on his fees and taxes to the State of Texas. The Texas Alcohol and Beverage Commission (TABC) came into to yank the license from the bar owner. He filed a Chapter 13 bankruptcy to reorganize the debt and to pay it. The TABC cannot then take the license and in effect take away the ability of the person to make a living.
Clients are often faced with huge garnishments on their wages from the IRS, Attorney General or for unpaid student loans. While those types of debts are usually not dischargeable, the garnishment itself can be stopped. Sometimes, a plan can be put into place that allows those debts to be fully paid. Sometimes it is just a matter of getting rid of the credit card debt and other obligations to free up money to be able to pay those huge debts that simply will not go away.
If you are facing an unusual financial situation that you think might be benefited by filing a bankruptcy, give us a call at (800) 215-9089 or email us. We offer a FREE, no-obligation consultation. We can explain the bankruptcy and non-bankruptcy options as well. Give us a call and let us try to help.