Clients call our office for a variety of debt related issues. Most of the time the client is aware of the debt and the standard ramifications of a judgment. A judgment in Michigan can result in creditors garnishing your wages, bank account, or Michigan state tax refund. It may also result in a seizure of property or a lien being placed on property. Very few clients realize that under Michigan law their license may be suspended due to an unsatisfied judgment that arose out of the ownership, maintenance, or use of a motor vehicle. Therefore, it comes as a shock when they get pulled over and the police officer explains to them that they are driving on a suspended license.
Suspended License Due to Debt
Under MCL 257.511, if a person fails, within 30 days, to satisfy a judgment, the plaintiff can request the court to forward an abstract of the court record of the judgment to the Michigan Secretary of State. The Secretary of State may then suspend your license. Your license will remain suspended and will not be reinstate or renewed until (1) notification that an installment payment agreement is received, and (2) you file proof of financial responsibility or the judgment has been satisfied. Once the Michigan Secretary of State receives the judgment from the court they will send you a letter. You will have 30 days from the date of the letter before your license is suspended.
Penalties for Suspended License
There are severe penalties for driving with a suspended license. MCL 257.904(1), (2), and (3) and 904b provides that a person convicted of Driving While License Suspended, Revoked or Denied or any unlawful operation of a motor vehicle while the person’s license is suspended, revoked, or denied may be sentenced to imprisonment for up to 90 days, or fined up to $500, or both, and for a second or subsequent conviction may be imprisoned for up to 1 year and fined up to $1,000 or both. Such conviction or convictions will result in the confiscation of the person’s license plates and the impoundment of the person’s vehicle for at least 30 days.
As you can see, there are some serious ramifications for failing to pay a judgment which was the result of a vehicle accident. If you are in a lawsuit which arose out of the ownership, maintenance or use of a motor vehicle, then it’s important to know your options. Give our office a call so we can review your case and help determine the best way to prevent your license from being suspended. Or, if it has already been suspended, figure out the best way for it to be reinstated.
Bankruptcy May Help
Depending on the amount of the judgment, one of the best ways to satisfy a judgment is to clear the debt in bankruptcy. The filing of a bankruptcy, either chapter 7 or chapter 13, will eliminate the underlying debt from the judgment against you. As a result, the Michigan Secretary of State will reinstate your license or not suspend your license in the first place. If the filing of the bankruptcy takes place after your license has already been suspended then you may need to pay reinstatement fees to the Secretary of State’s office. If you file a bankruptcy before your license is suspended then it’s important to contact the Michigan Secretary of State and let them know you filed for bankruptcy so they do not suspended your license.