Here is a bill that is a decade or two overdue. HB 1146 concerns the effect bankruptcy has on judgments pertaining to motor vehicle accidents.
Indiana has a nice little legal feature designed to encourage folks who operate motor vehicles to comply with the motor vehicle insurance laws. If you have a civil judgment entered against you because of a motor vehicle accident (up to the minimum insurance required) and you fail to pay the judgment within 90 days (presumably because you don’t have the money and were not properly insured), the judgment holder can apply to have your license suspended until you pay up. I do this routinely in my subrogation collection practice against uninsured motorists, and it provides much better leverage against debtors than I have in my average collection case.
When implementing this tool, Indiana tried to hedge against bankruptcies. Currently IC 9-25-6-7(b) says that a bankruptcy discharge won’t lift a license suspension. A court case from, seems like, 15 or 20 years ago essentially said, “nice try, but federal bankruptcy law trumps Indiana state law and, it doesn’t matter what the state law says, the discharge voids the license suspension.”
So, it’s nice of the Code Revision Commission to recommend cleaning up this code provision. Such a thing can’t really be included in the technical corrections bill because it’s not purely technical. But, it should be an uncontroversial clean up. Carrying this sort of legislation is, by the way, mostly thankless. So, I’m happy that Rep. GiaQuinta has taken it upon himself to move this legislation through the process.
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