Can Bankruptcy Wipe Out My Traffic Tickets? Can it Reinstate My Driver’s License?

People often ask if they can discharge (“wipe out”) traffic tickets, parking tickets, or toll charges in bankruptcy.

traffic ticket discharge in bankruptcyA related question is whether bankruptcy can help reinstate a suspended driver’s license.

As with everything in bankruptcy, the answer is “it depends.” It depends on what kind of bankruptcy you are filing, what kind of tickets you have, and the reason for your license suspension. We’ll tackle these questions one by one.

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Look to Chapter 13 For Relief

Chapter 7 bankruptcy can’t discharge traffic tickets. This is because it cannot discharge “a fine, penalty, or forfeiture payable to and for the benefit of a governmental unit.” [11 U.S.C. §523(a)(7).]

A debt owed for a traffic ticket is a “fine” or “penalty” “payable to and for the benefit of” the state, city or other local “governmental unit” that issued it to you.

But Chapter 13 bankruptcy does NOT exclude “a fine, penalty, or forfeiture payable to and for the benefit of a governmental unit” from discharge.  [11 U.S.C. §1328(a)(2).]

So, many traffic tickets, parking tickets, and toll charges can be discharged in Chapter 13 bankruptcy.

But, let’s read the fine print…

Traffic Crimes vs. Violations or Infractions

To be dischargeable, the traffic ticket(s) must be for a “violation” or “infraction.” In other words, the ticket must not be for a “crime”– that is, a misdemeanor or felony. [11 U.S.C. §1328(a)(2).]

Misdemeanor and felony traffic tickets are not dischargeable.

If your driver’s license was suspended because you (1) received a felony or misdemeanor traffic ticket OR (2) failed to pay fines or restitution associated with a felony or misdemeanor traffic ticket, you cannot use bankruptcy to reinstate your driver’s license.

So, is your traffic ticket or fine “criminal” or “non-criminal”? These terms are not defined in the Bankruptcy Code. You would need to refer to your state’s statutes for help with these definitions.

License Reinstatement Procedure- How Fast?

How quickly can you get your driver’s license reinstated after filing your Chapter 13 bankruptcy?

The answer will depend on the following:

  1. Why was your driver’s license suspended in the first place?
  2. Are the fines giving rise to your license suspension dischargeable?
  3. Does your Chapter 13 payment plan include provisions that might help you pay non-dischargeable fines and restitution more quickly, thereby helping reinstate your license more quickly?  (Not possible in all cases.)
  4. What are the procedures under your state’s laws for driver’s license reinstatement in a bankruptcy scenario?

We can help you answer these questions.  For more information, contact us for a free no-obligation phone consultation.