Immediately upon filing the Bankruptcy, your license is eligible for reinstatement from a suspension for an unpaid judgment. That is because Kentucky’s financial responsibility law says it only remains suspended until the judgment is stayed or removed. A federal court order is issued the second the bankruptcy is filed. The stay is immediate. You don’t have to ask or wait for it to be effective.

A judgment only has to be issued against you in Kentucky and remain unpaid for you to lose your license. You continue to be ineligible to drive until the judgment is stayed (temporarily suspended due to bankruptcy), discharged (forever barred due to bankruptcy) or satisfied (paid).   Normally persons who lose their license due to an unpaid accident judgement file bankruptcy to reinstate the license. You may file either a Chapter 7 or Chapter 13 and reinstatement does not require that you pay back anything to the person who was injured.   The license suspension is not automatic. It has to be reported to the Department of Transportation. Normally the insurance company for the injured person will report it upon non-payment.

Drunk Driving accidents are not discharged automatically in Chapter 7 or 13. However, the injured party has to object to the discharge, or a drunk driving debt may be discharged anyway. The objecting party has to prove the damages were due to drunk driving and without a judgment stating it was due to drunk driving the debt is discharged.

Attacking the judgment

Only a judgment takes away the license. You may want to make payments for a period. After a period of time the statute of limitations for an accident becomes effective. A release of the judgment or order of satisfaction is also effective in getting your license back. If you win the lawsuit, there is no judgment. However, if you don’t file an answer or appeal on time, they will win the lawsuit. Whenever you are sued seek a qualified attorney. A judgment is effective for 20 years and can be renewed for another 20. An Order to Vacate or Dismiss is also effective to reinstate your license. You would need a certified or file-stamped copy of the order for the Kentucky Department of Transportation office.

Kentucky Transportation Cabinet 200 Mero Street Frankfort, KY 40622 (502) 564-1257

Division of Driver Licensing

K.R.S. § 187.410   K.R.S. § 187.420

Kentucky’s Financial Responsibility Law states that on receipt of an unpaid judgment, the Cabinet will suspend the driver’s license and registration of any person against whom the judgment was rendered. K.R.S. § 187.410   The License remains suspended until the judgment is stayed, satisfied or discharged K.R.S. § 187.420

187.410 Suspension for nonpayment of judgment the Exception

(1) Upon the receipt of a certified copy of a judgment, the cabinet shall forthwith suspend (except as provided in KRS 187.440) the license and registration and the nonresident’s operating privilege of any person against whom such judgment was rendered.

(2) If the judgment creditor consents in writing, in such form as the cabinet may prescribe, that the judgment debtor be allowed license and registration or nonresident’s operating privilege, the same may be allowed by the cabinet, in its discretion, for six (6) months from the date of such consent and thereafter until such consent is revoked in writing, notwithstanding default in the payment of such judgment, or of any installments thereof prescribed in KRS 187.440.

187.420 Duration of suspension.

Such license, registration and nonresident’s operating privilege shall (except as provided in KRS 187.440) remain so suspended and shall not be renewed, nor shall any such license or registration be thereafter issued in the name of such person, including any such person not previously licensed, unless and until every such judgment is stayed, satisfied or discharged.


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