Can Chapter 7 or 13 Bankruptcy Help You Regain Your License?

 Posted on September 04, 2025 in Bankruptcy

For most adults, losing driving privileges can be devastating. We drive to and from work, to school, to after-school events, to run errands, and for recreational activities. What many people do not know is that in Texas, a license suspension is not only a consequence of a DWI conviction. Unpaid judgments following a car accident, traffic citation-related debts, or surcharges tied to old violations can all result in the loss of one’s driver’s license.

Unfortunately, without a driver’s license, it becomes exponentially more challenging to get to work, and without a job, it becomes impossible to pay those debts. The situation can make you feel as though you will never escape these penalties. In certain situations, bankruptcy may be the best solution available.

Filing Chapter 7 or Chapter 13 bankruptcy could potentially help you eliminate or manage the debts that are standing between you and regaining your Texas driving privileges. An experienced Fort Bend, TX bankruptcy lawyer can assess your situation and help you determine whether filing for bankruptcy is the right decision for you and your future.

How Do Texas Drivers Lose Their Driving Privileges as a Result of Debt?

There are many scenarios in which an individual can lose their driving privileges due to debt. A person who causes an accident while uninsured and is unable to pay for the damages could have his or her driver’s license suspended until the debt is satisfied. Individuals with outstanding traffic tickets or unpaid fees may have a hold placed on their driver’s license renewal, or they may face license suspension.  

Under the old Texas Driver Responsibility Program (repealed in 2019), some people still carry debt related to this program.  Texas drivers may lose their driving privileges for unpaid debts related to court fines and traffic tickets through the Failure to Appear/Failure to Pay program, which prevents license renewal and can ultimately lead to a license suspension. All outstanding fines, court costs, and fees must be paid to clear a hold and allow for license renewal or reinstatement.   

How Could Chapter 7 Bankruptcy Help a Driver’s License Suspension for Debt?

Under Chapter 7 bankruptcy, many unsecured debts can be discharged. This includes debts for accident judgments (except those resulting from DWI, intentional harm, or criminal conduct). Generally, traffic tickets and court fines are not dischargeable in bankruptcy. However, Chapter 7 bankruptcy can discharge other unsecured debts, freeing up funds to pay non-dischargeable fines.

Once credit card debt, personal loans, and medical debt have been discharged, the individual can redirect funds toward paying traffic and court fees, which in turn can lead to a license reinstatement. In some cases, filing for Chapter 7 bankruptcy can trigger the reinstatement of a license, although any associated government fees must still be paid.  

How Could Chapter 13 Bankruptcy Help with License Reinstatement?

Chapter 13 bankruptcy reorganizes debt by creating a structured repayment plan that lasts from three to five years, effectively managing debt. This repayment plan can include judgments for accidents, unpaid surcharges, or fines and fees that prevent license reinstatement. Depending on the reason for the license suspension, DPS may allow reinstatement once proof of repayment through Chapter 13 bankruptcy has been established. As soon as the court issues the automatic stay, the individual’s license will be unsuspended if the debts are covered under bankruptcy.

Chapter 13 works well for drivers with significant, ongoing debt (and a steady income) that Chapter 7 cannot wipe out. Chapter 13 is also broader, clearing some government fines, such as unpaid traffic and civil penalties, that Chapter 7 does not.   Debts that led to the suspension can be included in the repayment plan, allowing any fines owed to the government that are fully dischargeable to be paid off over the plan's life.

Contact a Montgomery County, TX Chapter 13 Bankruptcy Attorney

If your Texas driver’s license has been suspended as a result of debt, bankruptcy could provide the financial relief you need to regain your driving privileges. A knowledgeable Fort Bend, TX Chapter 7 bankruptcy lawyer from The Fealy Law Firm, PC can help you get through the hard times and take care of your finances. Call The Fealy Law Firm, PC to schedule your free consultation.