Wisconsin Administrative Code › Department of Transportation › Chapter Trans 128 - Traffic Violation And Registration Program › Section Trans 128.10 - Effect of bankruptcy on vehicle registration

Current through June 24, 2024
(1) BANKRUPTCY THAT
			 PRECEDES TVRP SUSPENSION. In any case in which the department is notified of a
			 pending bankruptcy proceeding and applicability of a stay under
			 11 USC 362, the
			 department shall release any registration suspension imposed under this chapter
			 affecting the vehicle registration of the debtor. The authority may not refile
			 its notice of unpaid judgment, citation or towing and storage charges
			 associated with a parking citation until the stay is no longer in effect.
Note: The co-debtor stay under
				11 USC
				1301 applies only to consumer debt. Fines,
				forfeitures, and towing and storage charges associated with parking citations
				are not consumer debt. Therefore the co-debtor stay of
				11 USC
				1301 does not impact TVRP cases involving a
				non-bankrupt person who is liable with a bankruptcy person.
(2) EFFECT ON VEHICLE REGISTRATION.
(a)
Reinstatement.
A vehicle
			 owner whose vehicle registration is suspended or subject to refusal under this
			 chapter who files a petition in bankruptcy, and from whom collection of a
			 pre-bankruptcy debt arising prior to the filing of the petition is stayed under
			 11 USC 362, may
			 reinstate his or her vehicle registration. The person shall be subject to all
			 the same reinstatement, filing and fee requirements as any other person seeking
			 registration reinstatement following a registration refusal or suspension.
Note: Liability for forfeitures is not "consumer debt" under
				11
				USC 101(8). Therefore, Ch.
				13 co-debtor stay does not prohibit collection against non-bankrupt persons who
				are liable on a debt with a bankrupt person.
(b)
Release of suspension ordered in
			 violation of automatic stay.
If the department is notified that a stay
			 prohibiting action against a debtor under
			 11 USC 362 was in
			 effect at the time the department suspended a debtor's vehicle registration
			 under this chapter, the department shall reinstate the bankruptcy debtor's
			 vehicle registration without any reinstatement fee.
(c)
Reimposition of
			 suspension.
The department may suspend or refuse a debtor's vehicle
			 registration that was released under sub. (1) or this subsection upon a
			 subsequent TVRP case filing by a suspending authority. Such a filing shall be
			 deemed a representation by the authority that the debt described in the filing
			 was not discharged or satisfied within the bankruptcy proceeding and that no
			 bankruptcy stay is in effect.
Note: While forfeitures are not generally dischargeable under
				11 USC 523(a)
				(8), towing and storage charges would
				ordinarily be discharged in a bankruptcy proceeding. Authorities and delegated
				agencies are encouraged to consider each type of debt separately in deciding
				whether to order the department to suspend or refuse registration.
(d)
Proof.
The
			 department may require satisfactory proof that a registrant's debts from a
			 forfeiture or towing and storage charges associated with a parking citation
			 have been discharged in a bankruptcy proceeding in any case where a debtor
			 seeks to reinstate a vehicle registration after the bankruptcy case is closed
			 or dismissed, a discharge has been granted, the automatic stay has been lifted,
			 terminated, annulled or modified, or a suspending authority has filed a
			 subsequent notice under par. (c). Acceptable proof may include copies of the
			 schedules for the bankruptcy case listing the suspending authority as a
			 claimant in the bankruptcy, proof of the filing date, such as the notice of
			 bankruptcy filing mailed by the bankruptcy court or a copy of the petition
			 containing the clerk's file stamp showing the date the petition was filed, and
			 an affidavit that the debt is dischargeable under the United States bankruptcy
			 code and has been discharged.
Note: Forfeitures and fine debts are not dischargeable in Ch. 7
				bankruptcies. 23 USC 527(a) (7). Criminal fines are not dischargeable in Ch. 13
				bankruptcies either. 23 USC 1328(a) (3).
(e)
Disputes.
In any case
			 where a debtor registrant and a suspending authority dispute whether a
			 discharge has affected debt for which registration refusal or suspension is
			 requested, or in any case where a debtor registrant claims a forfeiture was
			 discharged in a ch. 7 bankruptcy or a criminal fine was discharged in any
			 bankruptcy proceeding, the department may require one or both parties to obtain
			 a court order that decides whether the debt is discharged.
(f)
Court determinations.
The department shall accept court findings or orders regarding discharge of a
			 claim in an action between the registrant and the suspending authority as
			 determinative, and may impose or release a registration suspension or refusal
			 in accordance with the determination of the court.
Note: While the Department does not have authority to require
				debtors to provide a certain type of notice of bankruptcy filing to it under
				federal law, debtors who are subject vehicle registration suspensions under s.
				345.28(4)
				(a)2, Stats., will find that the Department's
				reaction to a bankruptcy filing is faster and more predictable under this
				section if the Department is listed on the mailing matrix for the proceeding
				with an address of Wisconsin Department of Transportation, Uninsured Motorists
				Unit, P.O. Box 7919, Madison, WI 53707-7919.