Reinstatement of Driver’s License in Bankruptcy

Reinstatement of Driver’s License in Bankruptcy

The Oklahoma Department of Public Safety sometimes revokes the driver’s license of an individual who causes an accident, was uninsured, and fails to pay a judgment in a lawsuit arising from the accident. In most situations, the filing of a bankruptcy case entitles the judgment debtor to reinstatement of the license.

11 U.S.C. Section 525(a) provides, “[A] governmental unit may not deny, revoke, suspend, or refuse to renew a license, permit, charter, franchise, or other similar grant to, condition such a grant to, discriminate with respect to such a grant against, deny employment to, terminate the employment of, or discriminate with respect to employment against, a person that is or has been a debtor under this title or a bankrupt or a debtor under the Bankruptcy Act, or another person with whom such bankrupt or debtor has been associated, solely because such bankrupt or debtor is or has been a debtor under this title or a bankrupt or debtor under the Bankruptcy Act, has been insolvent before the commencement of the case under this title, or during the case but before the debtor is granted or denied a discharge, or has not paid a debt that is dischargeable in the case under this title or that was discharged under the Bankruptcy Act.”

On application, DPS will reinstate the license as soon as a bankruptcy case is filed. The debtor must list DPS on Schedule F as well as the judgment creditor. DPS will require the debtor to pay the normal reinstatement fee. DPS does not wait until the discharge is entered, because the statute says “dischargeable”, not “discharged”.

DPS would not be required to reinstate the license when the debt arising from the accident is not dischargeable in the bankruptcy case that is being filed. One example would be a bankruptcy case in which the debtor is not entitled to a discharge because he received a discharge in a previous bankruptcy case filed too recently (see my separate post that subject). Another example would be where the debtor is not entitled to discharge the debt because it is for “death or personal injury caused by the debtor’s operation of a motor vehicle, vessel, or aircraft if such operation was unlawful because the debtor was intoxicated from using alcohol, a drug or other substance.” 11 U.S.C. Section 523(a)(9).

Published by

Brian Huckabee

Brian Huckabee is a Tulsa, Oklahoma, attorney with a practice concentrated in bankruptcy and business law. He has handled thousands of business and consumer bankruptcy cases in the past three decades, consisting primarily of chapter 7 and 13 cases, but also including numerous chapter 11 business reorganizations and chapter 12 farm reorganizations. He represents corporate and individual debtors but also has credit union and creditor clients. He has served as an Adjunct Settlement Judge in the United States Bankruptcy Court for the Northern District of Oklahoma. He is a member (2020 chair) of the Board of Directors of the Bankruptcy and Reorganization Section of the Oklahoma Bar Association. He is licensed in all of Oklahoma’s federal judicial districts, but he concentrates in the Northern and Eastern Districts. He is a member of the Bankruptcy Section of the Tulsa County Bar Association. He received a Bachelor of Arts degree with Honors from Oklahoma State University in 1978 and a Juris Doctorate degree from University of Oklahoma in 1981. He has been married for over 30 years to a Tulsa attorney, and he has two grown children, one of whom is a Tulsa attorney. He attends Harvard Avenue Christian Church in Tulsa.