Will filing bankruptcy clear a judgement and release a driver's license?
Question Details: About 17 years ago, I was in an accident when I lived in OH. The next year I moved to PA and have not had my license. I have tried multiple times to work with the attorney who hold my judgement against me to make payment arrangements but they would never accept reasonable arrangements. So now I'm trying to file bankruptcy here in PA. Will filing here release my license with Chapter 7 or will I have to file Chapter 13?
There is a misconception about bankruptcy: that filing it automatically makes judgments go away. It doesn't; rather, the judgments will go away AFTER being discharged in bankrutpcy, and the terms of the discharge may not necessarily be to your liking and will take some time.
In chapter 7, you have to liquidate most assets--sell off what you own; use the money in your bank account(s); etc.--except for some assets statutorily exempted from liquidation. Those assets are used to pay creditors. Depending on how the amount you owe compares to your assets, you could end up still paying a considerable portion of what you owe--and may have to give up much of what you own. The judment is only discharged after the court determines what the creditors can get and distributes that amount to them.
Chapter 13 essentially means living by a strict, court ordered budget for 5 or more years, while you pay as much as possible to your creditors; any judgments are only discharged at the end of the process, after years.
So yes, you can eventually get the judgment discharged by bankruptcy, at which point you should be able to regain you license, but it can take months to years and you give up much to do this.