Suspended license due to insurance debt

anne17 · #1 03-27-2008, 10:12 PM

My son let his car insurance lapse while in the process of moving into SC from another state three years ago. He had a car accident. He has had insurance ever since. He is a student and I am helping him with his rent - he makes a small amount of money working weekends - but not enough to support himself. He owns nothing except a very old car. Today the DMV visited his apartment and suspended his driver's license and the license tag on his car. He was given a phone number for an out of state debt collection lawyer representing the insurance company of the car he hit. I called them and they want him to pay $12,000. He does has no hope of ever being able to pay this. The removal of his driving privileges 6 days prior to the end of the semester could kill his hopes of an education and a brighter future. Is this legal? I read online that he could possibly sign the document they want him to sign, pay one payment, get his license back, and then declare bankruptcy. Can that be done? Can they suspend his license again if he does that?

ecmst12 · #2 03-27-2008, 11:01 PM

He will not get his license back until the debt is paid in full, so far as I know. He should think long and hard before declaring bankruptcy - he is very young, and it will be with him for a long time. If he can borrow the money somehow, and pick up more hours at his job to make the loan payments, THEN he can get his license back.

StephenH · #3 03-28-2008, 03:17 AM

You should call the court and see if they will arrange some sort of a payment plan. They might agree to this. They might be able to garnish his wages. If he has no assets, it is unlikely that they will be able to get it paid in full. Some states will allow one to get their license back, if they arrange a payment plan. As for declaring BK, you may want to consult an attorney.

anne17 · #4 03-28-2008, 03:24 AM

He has no job and no assets. His only work is pick up construction work - but with his school he has had little time for that. He has a bare mattress on a floor and his school books and an old car. Without transportation he cannot get to school.

racer72 · #5 03-28-2008, 11:48 AM

Quote:

Originally Posted by anne17

He has no job and no assets. His only work is pick up construction work - but with his school he has had little time for that. He has a bare mattress on a floor and his school books and an old car. Without transportation he cannot get to school.

Now is the time to get his priorities in order. Based on your posts, he needs a job more than he needs to go to school. I had to make that decision when I was younger, it was for different reasons, but I was able to return to school a few years later and picked up right where I left off.

ecmst12 · #6 03-28-2008, 02:09 PM

At the very least, he could cut back his classes to give him enough time to get a part time job. Many kids are able to work a few evenings a week while in school, it's doable. But paying the bill should be a high priority, not only because of his license, but because he caused the damage to the other person's car, and he should do what's necessary to make him/her whole.

anne17 · #7 03-29-2008, 12:26 AM

We got more details today. The lawyer's office sent us a form for him to sign. They are charging 12% interest so it's going up fast (nearly $14,000 now). The people in the car accident were taken care of by the insurance. It's the insurance company that's trying to get him to pay them back. What we're wondering is if he signs this contract and gets his license back - but later declares bankruptcy - can they take his license away again? With the terms of this contract, he would never be out of debt to this lawyer unless he outlives him. The contract states that if he ever stops paying, he will loose his driver's license. I guess the question is --- does bankruptcy (wiping of the debt) take care of the DMV? Or could they continue to hold that over him?

I agree he may have to give up school and go back to working minimum wage jobs. But it's sad to see all hopes of a better future dashed...

enjay · #8 03-29-2008, 02:03 AM

Anne, you are being extremely dramatic. I can't drive due to medical issues and somehow managed to graduate from college. 14K is not an insurmountable debt; he needs to pick up more work hours during the school year and work his butt off during the summers. I worked 40 hours a week during my last 2 years of school and he can too if the degree is important enough to him.

ecmst12 · #9 03-29-2008, 12:25 PM

He may be broke NOW, but he will not be in this situation forever. If the collection agency is charging interest, they must have already received a judgement. The debt will be around long after he graduates and has a better job.

Like I said, he does not have to LEAVE school in order to work more.

moburkes · #10 03-29-2008, 01:49 PM

I'm still trying to figure out how the DMV visited his house?

codysmom · #11 03-31-2008, 03:50 PM

moburkes - In the state of SC the DMV will come out and confiscate your license plate right off the vehicle if they have been notified that your insurance has lapsed and apparently if you have an auto accident judgement against you, as in this case. I work in the insurance industry and the insurance carriers are required to report coverage and coverage lapses to the DMV. They will also levy some pretty good fines fo being un-insured. I have had many insured come into the office with what I lovingly call Mcnasty letters from the DMV that they are going to be fined - as agents and carriers we can log into the DMV site and report the current coverage. I have even had an insured who's coverage lapsed call me one day in a panick needing to get new coverage as the DMV was removing the plate from his wife's car. She was at a card club meeting and he needed to get coverage and the plate back on the vehicle before she came home.

VeronicaLodge · #12 03-31-2008, 05:01 PM

why doesnt he live on compass and possibly get a job on compass, eliminating the need to drive?

mach1maddie · #13 03-31-2008, 06:54 PM

Anne,

My son, too, has similar circumstance. Rather than help him to avoid his responsibilities we have encouraged him to prioritize his obligations to others. First, he has learned not to let insurance 'lapse' and follow the law. Second, he has realized that it is time to get focused and work hard, like most of us parents do, in order to get what he wants out of life.

However, do be careful that the other insurance carrier is not trying to way over charge him. My son was being charged for more than the damage he caused and has opened a discussion towards re-negotiating the amount.

All of this is more amenable than considering bankruptcy.

moburkes · #14 03-31-2008, 08:39 PM

Quote:

Originally Posted by codysmom

moburkes - In the state of SC the DMV will come out and confiscate your license plate right off the vehicle if they have been notified that your insurance has lapsed and apparently if you have an auto accident judgement against you, as in this case. I work in the insurance industry and the insurance carriers are required to report coverage and coverage lapses to the DMV. They will also levy some pretty good fines fo being un-insured. I have had many insured come into the office with what I lovingly call Mcnasty letters from the DMV that they are going to be fined - as agents and carriers we can log into the DMV site and report the current coverage. I have even had an insured who's coverage lapsed call me one day in a panick needing to get new coverage as the DMV was removing the plate from his wife's car. She was at a card club meeting and he needed to get coverage and the plate back on the vehicle before she came home.

Do you have the statute?

southernlegal · #15 04-01-2008, 08:42 AM

I don't think declaring bankruptcy is a very good idea. This is especially true for someone so young. Tell him to pay off his debts and he can start getting back on track.