Filing bankruptcy can help you get your driver’s license back if it’s been suspended for failure to pay a judgment.
South Carolina law provides that if a judgment is entered against you as a result of an auto accident, your license will be suspended until the judgment is paid. S.C. Code Ann. § 56-9-430.
However, if the debt is discharged in bankruptcy, the South Carolina Department of Motor Vehicles (“DMV”) must reinstate your driver’s license. Any South Carolina law to the contrary (such as that in S.C. Code Ann. § 56-9-470 stating that “[a] discharge in bankruptcy following the rendering of any judgment shall not relieve the judgment debtor from any of the requirements of this article”) is unconstitutional.
How’s the South Carolina law unconstitutional?
It’s pretty simple. Federal law trumps–or “preempts”–state law. The U.S. Constitution allows states to make their own laws, but those laws can’t conflict with federal laws. This principle of law is found in the Supremacy Clause of the Constitution, which provides: “This Constitution, and the Laws of the United States . . . shall be the supreme Law of the Land; . . . any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.” U.S. Cons. Art. VI, cl. 2. Because bankruptcy law is federal law, it’s “supreme” over state law.
This issue was settled by the U.S. Supreme Court in Perez v. Campbell, 402 U.S. 637 (1971)
In fact, the Arizona statute providing that bankruptcy discharge did not affect the driver’s license suspension contained the same language we have in our current South Carolina statute. And the Supreme Court found the Arizona provision “constitutionally invalid.”
The Court noted the well-settled purpose of bankruptcy, stating: “This Court on numerous occasions has stated that ‘[o]ne of the primary purposes of the bankruptcy act’ is to give debtors ‘a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt.’ Local Loan Co. v. Hunt, 292 U.S. 234, 244 (1934).” Because the Arizona statute sought to contravene this principle of federal bankruptcy law, the Arizona statute could not stand.
A few years later, Congress added section 525(a) to the Bankruptcy Code, which codifies the Court’s holding in Perez v. Campbell, providing, in pertinent part: [A] governmental unit may not deny, revoke, suspend, or refuse to renew a license . . . against, a person that . . . has not paid a debt that is dischargeable in the case under this title or that was discharged under the Bankruptcy Act. (Emphasis added.)
How long will it take to get my license back? What’s the process?
Assuming you file a Chapter 7 bankruptcy, you’ll receive your discharge within about four months of your bankruptcy filing. After that, you can take your bankruptcy discharge to the South Carolina DMV. You’ll then be required to pay a reinstatement fee, and you’ll obtain reinstatement of your license. Keep in mind that until you receive your bankruptcy discharge, you’re not entitled to have your license restored. So the sooner you contact a bankruptcy attorney to get the process moving, the sooner you’ll get your license back.