The chapter 7 process is about 4 months. If the debtor meets the criteria, all dischargeable debt is discharged and eliminated. However, certain types of debt are specifically not discharged during bankruptcy. One type of debt that is not discharged are auto moving violation fines. This means that a chapter 7 bankruptcy filing does not effect such debt, which is still due and owing after the completion of the bankruptcy.
Also, the chapter 13 debtor may not eliminate such auto fines, as well. Typically, the township will consent to allow the fines to be paid through the bankruptcy plan. However, some townships are more difficult to deal with than others.
Depending on the bankruptcy judge, fines may be paid by the trustee, prior to payment of other types of debt. Other judges will not allow a trustee to pay the fines, until other types of debt has been paid and/or until after a certain number of months have elapsed after the bankruptcy filing.
A chapter 13 bankruptcy case will likely allow a debtor to reinstate his license, if his license is suspended solely due to a fine and/or surcharges. In other words, a debtor will not be able to reinstate his license, by way of a chapter 13 case, for the following reasons: failure to attend a court hearing; license is suspended as a result of a court penalty that specifically suspends a license for the violation. For example, the penalty for a DUI conviction, specifically suspends a person’s license for a certain time period. Under this scenario, a chapter 13 bankruptcy will not reinstate a person’s license. If a debtor’s license is suspended as a result of his failure to appear in municipal court, he must first resolve the municipal court issue.
If a person is filing a chapter 13 to restore his license, each municipality that is the cause of the suspension must properly notify the NJ Motor Vehicle Commission of their consent to restore their license upon the bankruptcy filing and that payment of the fine is be made through the bankruptcy plan.
Please note that there are municipal court administrators that are knowledgeable about this process and others who are clueless. This process may require a bankruptcy court motion.
Robert Manchel, the New Jersey bankruptcy lawyer, can be contacted at (866) 503-5655, to discuss the restoration of your license.