Losing a lawsuit may result in a judgment against the defendant for money damages. In many states having a judgment against you doesn’t mean much. State exemptions protect debtors from losing many of their assets to creditors. Homestead exemptions prevent a creditor from taking a judgment lien against the debtor’s home. However, in Texas the creditor can have the debtor’s driver’s license suspended if they fail to satisfy a judgment within sixty days. Suspension of the driver’s license continues until either the debtor proves that the judgment has been satisfied by providing the clerk a copy of a release or until the action is stayed.
If a debtor cannot afford to satisfy a judgment they have few options available to them other than filing bankruptcy. Having a suspended license may make it difficult to get to work if other transportation is not available. Some employers require that employees have a valid driver’s license, so even if the debtor can get to their employer’s place of business they may not be able to continue working. Losing a driver’s license may not simply prevent them from driving; it may also prevent them from paying their mortgage, buying food, and keeping their electricity on. Filing a bankruptcy case puts a stay in place which prevents creditors from further collection activities and it will also allow the debtor to have their suspended license reinstated without having to satisfy the judgment. There may still be administrative costs associated with reinstating the suspended license but these are relatively nominal.