(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associated with a parking citation until the stay is no longer in effect.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.
