In a previous article I discussed how Chapter 13 can be useful to reinstate a driver’s license that has been suspended by the Massachusetts Department of Revenue for unpaid taxes. Sometimes a license is not suspended, but is prevented from being renewed due to unpaid parking tickets, vehicle excise taxes, or EZ Pass fines. Parking tickets and excise taxes are collected by cities and towns in Massachusetts. If the registered owner of the vehicle does not pay the ticket or fine after a period of time, the municipality can notify the Registry of Motor Vehicles to put a hold on the owner’s registration and license. See M.G.L. c. 60A. This does not suspend the license or registration, but it prevents renewal until the debt is paid. This can be an unwelcome surprise when the time comes to renew.
If a person files bankruptcy and has been unable to renew a license or registration because of these debts, then the automatic stay imposed by the bankruptcy code can provide relief. Regardless of whether the debt is dischargeable (survives the bankruptcy), continuing to block the renewal is arguably a violation of the automatic stay because it is an attempt to collect a debt during the bankruptcy. I recently assisted a Chapter 7 bankruptcy client in removing several holds by sending letters to the municipalities and Department of Transportation outlining the law. Through letters and a few follow-up phone calls to the municipalities, I was able to remove all of the holds so that the client was able to renew her license.