Legal Question in Bankruptcy in Florida
drivers license reinstatement
I was involved in an accident two years ago and had no insurance on my car at the time. My car was already paid for however I did 13,200 in damage to two other cars. My drivers license was suspended until the amount is paid off. I obtained the paperwork from the dmv and they said that the other two owners would have to sign a notarized form stating that I had settled all debts with them before I could get my license back. I'm a working college student and have no way of paying this money for years. I was wondering if I filed bankruptcy it would clear the debts that I now owe to their insurance agencies. I would like to find out the differece in chapter7 and chapter13 bankrupties, and whether either would be helpful in my situation.
2 Answers from Attorneys
Re: drivers license reinstatement
Yes....bankruptcy will discharge this debt however it should not be filed for casually. You must consider all aspects of the filing including the fact that you will be unable to obtain credit for an extended period and cannot file for bankruptcy again for at least 7 years. The filing of a bankruptcy may be considered by a potential employer in determining your character and could keep you from getting "the" job you want.
Chapter 7: Often called a "liquidation," this type of bankruptcy lets you completely wipe out all unsecured debts like credit card debts, lines of credit, unsecured loans, the debt for the damage as a result of your accident, etc. The downside is, you are only allowed to keep $1,000.00 in personal assets and an additional $1,000.00 in equity in a vehicle. Any additional assets will be used to pay your creditors. Note: Congress and the President are seriously considering severely limiting Chapter 7
protection.)
Chapter 13: This type of bankruptcy is a reorganization, which allows you to keep your assets and repay your creditors a portion of what you owe over a three to five year period. It might be 10 cents on the dollar or substantially more, depending upon the circumstances. A corporation cannot file a Chapter 13; only individuals, sole proprietorships and partnerships can. Corporation would file a Chapter 11 which is very similar in nature.
I strongly suggest that you meet with a competent bankruptcy attorney to review your financial situation.
Scott R. Jay, Esq. 305-249-8000
Re: drivers license reinstatement
Both Chapter 7 and 13 will allow re-instatement of your license. Chapter 13 will require a repayment of some sort to creditor. Chapter 7 will not and is a straight liquidation of debts.
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