It is possible for an insurance company to get a judgment and the request the court to suspend a license for non-payment after entry of that judgment.  If there is not a judgment entered right now, then your mom's license cannot be suspended just yet.  It sounds a bit like someone is trying to railroad your mom into a payment in full.  She needs to hire an attorney to help her negotiate an agreement and properly reduce it to writing so that she won't be subject to any more threats.