Suspending Licenses Doesn’t Improve Collection Rates: Report

State law in Tennessee allows for the revocation of driver’s licenses of those who owe debts to the court system, but suspending licenses actually does not improve collection rates, according to a report released by a nonpartisan think tank in the state. Income, not having their driver’s license suspended or revoked, is a bigger driver of whether individuals pay off their court debts, the report concludes.

A copy of the report — Reducing the Harms of Court Debt: Driver’s License Revocations are an Ineffective Policy for Increasing Court Collections — released by ThinkTennessee is available by clicking here.

About half of the states in the country still allow for the driver’s licenses of individuals with unpaid court debts to be suspended, and only 17 have outright banned taking such a step to induce those with unpaid debts to make payments.

A typical defendant in Tennessee that has an outstanding court debt has income between 39% and 69% of the federal poverty level — or between $5,300 and $9,377. Revoking driver’s licenses is actually counter-productive, because it makes it harder for people to get to work and traps them “in a cycle of debt and poverty,” according to the report.

Most counties in the state had higher collection rates before the state law allowing license suspensions went into effect in 2011, according to the report.

The only time where collection rates have increased is when the COVID-19 pandemic led to the government’s stimulus programs, which indicates that a “substantial change” in the financial circumstances of individuals is needed in order to improve collection rates.

Instead, the state would be better eliminating fees that are deemed to be uncollectible and requiring more consistency in the assessments of whether an individual has an ability to repay the debt, according to the report.

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