Judgments and Suspended Licenses

BankruptcyIn Texas, if a defendant fails to pay a plaintiff the amount awarded them in a judgment resulting from a car accident the judgment creditor can request that the Texas Department of Public Safety suspend their license until such time as the judgment is satisfied.  Tex. Trans. Code § 601.332.  This statute has a similar result as the statute that states that a person can be jailed for not paying child support.  In the case of child support, if the person owing the support is jailed then they can’t work, and if they can’t work then they can’t pay the child support.  Likewise, if a debtor’s license is suspended for not paying a judgment then the debtor may not be able to go to work in order to earn money to pay the judgment.

The statute does state that if collection of the judgment is stayed then the suspension will be lifted.  One type of stay that applies to this situation is the stay that goes into effect automatically when a bankruptcy case is filed.  Debtors who have a suspended license due to failure to pay a judgment can file bankruptcy, provide proof of the bankruptcy filing to Texas Department of Public Safety, and then pay a fee for reinstating the license and the suspension will be lifted.  It can take several weeks for DPS to review the request.  Of course, the debtor can also satisfy the judgment in order to obtain reinstatement of their driver’s license.  A suspended license by itself is probably not a good reason to file bankruptcy.  If a debtor has the money to pay the judgment, it is best to pay the debt rather than file bankruptcy.