So when people come to my office to inquire about a Ch. 13, I always tell them, that there needs to be a good reason to do a Ch. 13 over a Ch. 7, because the process is much more complex and costly. Some of the good reasons to file a Ch. 13 are saving a home from foreclosure, the inability to file another Ch. 7 because of a prior filing, or working out a reasonable repayment plan for taxes.
One extremely common reason to file a Ch. 13 may soon be going the way of the dinosaurs. In a recent ruling in Washington State, Superior Court Judge Mary Sue Wison, ruled that suspending someone's driver's license because of unpaid (non-criminal) traffic tickets was unconstitutional. In an extremely unprecedented move, the Washington State Department of Licensing has chosen not to appeal the ruling, and to waive the reinstatement fees.
Suspending driver's licenses for failure to pay traffic tickets is the normal practice across the country, however, there is no argument that this practice is extremely onerous to regular people. The ability to drive is directly tied to a person's ability to work, access medical care, and other necessary services. This lawsuit was brought by the ACLU, and even if you do not live in Washington State, I suspect that you will see similar lawsuits start to spring up (if they haven't already done so) all across the country.
This is a huge win for normal people, and even though it means fewer Ch. 13 Bankruptcy cases for my firm, I am extremely happy that this ruling has come down. I regularly see the difficulties that my client's face from driver's license suspensions and oftentimes they would love to make arrangements to pay, but because the collection agency can suspend their driver's license there is no incentive to offer reasonable monthly payments.
So what does this mean if you are in an existing Ch. 13 case? First, you should keep in mind that there may be some traffic fines that are criminal in nature, such as Negligent Driving. If you have criminal fines that caused your license suspension, you should move carefully, as this ruling only applies to unpaid traffic infractions. Also, while the new ruling also includes “failures to appear” (FTA), you should carefully consider how your FTA's affect your driving record and what the judge ruled at the time.
As with all major changes in the law, your first point of contact is your Bankruptcy attorney. Reach out to your existing Bankruptcy attorney to find out how this ruling might affect your case. It is also important to understand that while your driver's license might have been the original reason that you filed a Ch. 13 case, your attorney might have taken advantage of the other options in a Ch. 13 case, such as cramming down your loan balance on your car, lowering interest rates, or other terms that have nothing to do with your traffic fines. If you dismiss your Ch. 13 case, you might affect other aspects of your case, and so you want to proceed carefully and examine all the terms of your Ch. 13 plan.
I can't think of a time in my career when I was happy that a practice area was eliminated, but there is a first time for everything, and I am happy for my clients because this ruling will have an immediate and tangible affect on many of them. Having said that, proceed carefully and with as much information as possible. If you have criminal infractions, or are a habitual traffic offender, this ruling probably does not provide any relief for you, but in all cases it is worth exploring with your attorney whether or not this change will affect your Ch. 13 Bankruptcy.