If you lose your driver license because of a tort judgment, bankruptcy can revive it. That is great news in this tough economic times. A driver license can be jeopardized under state financial responsibility laws. The Supreme Court held in Perez vs Campbell that if the debt is discharged in bankruptcy, the license cannot be revoked or denied any longer. Furthermore recently many courts have held that any other discrimination based upon a discharged debt, such as a requirement that special insurance or a bond be purchased before a license can be granted, is also prohibited under the Supremacy Clause because it too would tend to conflict with the Congressional purpose of giving debtors a fresh start. Henry v. Heyison, 4. B.R. 437 (E.D. Pa, 1980) Similarly a license cannot be withheld on the basis of nonpayment traffic tickets which are dischargeable in chapter 13 cases. In such cases, section 525 has been read to mean that the debtor involved should be treated as if he/she discharged debt never existed.
Again, for a client who needs a driver license, but cannot pay a judgment or fines, bankruptcy is an ideal solution. As we all know, an automobile is an economic necessity and a tool to make a living and driver license provides that economic tool.