IN RE BURBANO
N/AOUTCOME: Judgment for Debtor
SUSPENSION OF THE LICENSE WAS AN ACT TO COLLECT A DEBT Under Georgia law, if a judgment debtor fails to pay a judgment related to a motor vehicle accident, the judgment creditor can request that suc ... h debtor's driver's license be suspended until at least $25,000 of such judgment is paid. O.C.G.A. § 40-9-60 - 40-9-62. The first question at issue here is whether the foregoing statute is a collection device intending to benefit and be used by judgment creditors. There are cases within and outside of the Eleventh Circuit that address that question. In 1994, a Rhode Island bankruptcy court considered a Rhode Island statute similar to Georgia's that provides for suspension of a judgment debtor's driver's license upon non-payment of a judgment within a certain time. In re Duke, 167 B.R. 324, 325 (Bankr. D.R.I. 1994). Although the creditor argued in Duke that the suspension was an exercise of the state's regulatory or police power, the court found that the purpose of the related statute was to "assist in the recovery of claims by motor vehicle accident judgment creditors." Id. Because the statute was driven by the debtor's lack of payment to the creditor, and not by the health and safety concerns that are the purview of the state, that statute was effectively just a collection mechanism for the creditor. Id. at 325-26 (quoting Muzio v. Sampson (In re Sampson), 17 B.R. 528, 530-31 (Bankr. D.Conn. 1982). Although the opposing party in Duke was the state agency itself, and not the underlying creditor, the case is relevant here because it holds that a state statute similar to Georgia's is really a collection mechanism for the underlying creditor. In this case, this Court finds that O.C.G.A. § 40-9-60 et seq. is a mechanism for a judgment creditor to use to collect upon its debt. The driver's licenses of judgment debtors are not automatically suspended upon failure to timely pay every judgment related to a motor-vehicle accident. Such suspensions only occur upon notification of the court by the judgment creditor. The judgment creditor has to take an affirmative action to notify the applicable state court that the judgment has not been paid, and only then does the law operate to suspend the license of the judgment debtor. Further, O.C.G.A § 40-9-61(b) specifically provides that, even in the face of the default, if the judgment creditor consents, the license suspension can be lifted. This statutory scheme does not appear to be intended to preserve the health and safety of the residents of the State of Georgia; it seems instead to be intended to assist judgment creditors in collecting their judgments. Therefore, like the statutes in Duke and Stephens, this Court finds that O.C.G.A. § 40-9-60 et seq. is really a collection mechanism available to certain motor-vehicle-accident judgment creditors, and therefore the continued employment of this collection mechanism after bankruptcy is prohibited by 11 U.S.C. § 362(a). That still leaves the question, however, of whether Grange's failure to provide the postpetition Amended Release is a violation of the stay.
