Car accidents are always undesirable and sometimes unavoidable as well. It welcomes a significant amount of financial degradation. However, the payment for recovery is usually done by the insurance, allowing you prompt relief. But what if your insurance limit is very low? What if you are being sued for car accident but have no assets? Certainly, it is more than frightening. But we suggest that you not be overwhelmed; there are escape routes. Let’s explore this in detail.
How to Deal with The Situation in 5 Way?
Below are the step-by-step guidelines.
- An in-depth understanding of the possible judgement is the first requirement. It will give you an in-depth understanding regarding the payment amount and associated deadlines.
- On the basis of the possible judgement criteria, check the possible options to make the payments. Even though you do not have any noticeable assets, this check-up may come up with some amount to make a partial payment; it will strengthen your position and show your good intentions.
- Check for other options, like negotiating a settlement, etc.
- Here, you should seek the consultation of an attorney. If you are unable to pay the respective fees, check with some non-profit organization that supports disadvantaged people in legal issues by providing a lawyer for free.
- Upon discussion with the lawyer, take action in response to the received notice.
6 Possible Consequences if You Can’t Pay
Please understand that being unable to pay and stating that won’t resolve the matter or bring judgement in your favour. Below are the details.
1. Wage Garnishment
If you are being sued for a car accident but have no assets and low or no insurance coverage, the authority will check your employment status at the first point. If you are employed and entitled to receive a monthly salary above the minimum, 25% of your monthly salary will be deducted to recover the damage-related payments. The opposition will get the amount directly from your paycheck without your intervention.
2. Seizure of Bank Account
Your bank account may be seized following the liquidation of the funds. Well, as there is no money currently in the account, you may think it is not a big problem. But, please note that you won’t have access to the upcoming deposits to your bank account(s). Please note that the context of bank account seizure is also applicable for joint accounts as well.
3. Property Liens
If you are unable to pay the recovery amount, the plaintiff will be able to place a lien on your home to secure the amount owed. It indicates that you cannot sell the house or transfer the house’s ownership to another person until the lien is paid off.
4. License Suspension
After the decision is given against you, you are bound to pay the lawsuit amount within 30 days. As you are unable to pay, the authority may suspend your driving license. In this case, the below-listed items will be revoked.
- The registration card.
- Licence plate from the vehicle.
- Stickers proving the vehicle’s registration.
5. Damage to Credit Score
Upon not receiving the recovery amount, the opposition or court can escalate the issue to the national credit bureau. It will impact your credit score negatively. And you will face a substantial amount of challenges obtaining a cash loan or an on-credit purchase facility in the future.
6. Further Legal Action
Being unable to pay for not having any assets can force the opposition to take further legal action against you. In this case, the opposition may get a court order to seize your vehicle or house.
What to Do if You are Being Sued for Car Accident But Have No Assets?
Below are the most possible strategies that you can apply.
1. Consult a Lawyer
This is the very first step. Hire an experienced car lawyer and inform him or her of your inability to pay the claimed amount. Strictly follow the guidelines of the attorney and do not contact the other party or their lawyer. Please note that your lawyer will handle all the communications.
2. Collect a Collection Proof
Upon consulting with the lawyer, submit a “Collection Proof Letter.” This document will inform the opposition that you are already struggling with debt in the forms of taxes, child support, etc. Dragging you to court is not worth it at all, as you are unable to pay even a little amount.
3. Negotiate a Settlement
Take the lawyer’s assistance to form an agreement letter in consideration of the no-asset criteria at present. This agreement may be supported by an advance-dated check or another verifiable payment method that will be applicable in the future. This approach can help you avoid a court trial while increasing the chance of getting a reduction in the amount due.
4. File for Bankruptcy
As you are being sued for car accident but have no assets to pay the claimed amount, declaring bankruptcy is a good solution. Filing for bankruptcy can provide you with protection from the opposition while enabling a higher chance of discharging your debt obligations.
5. Agreement for Judgment
Well, you might not be able to pay now due to not having any assets. But the situation will surely change, and you will gain the ability to pay the money in small amounts. If you see that your financial situation will improve in the future, go for an agreement for judgement, i.e., scheduled installments.
We hope that now you are clear if you are being sued for car accident but have no assets. We suggest you do not overwhelm yourself and use your critical thinking skills. The strategies mentioned in this article are your lucrative options. Consult an experienced lawyer and use any of those as per suitability. However, you are not alone; many people face similar situations on a regular basis. With the right legal support, you can move forward and overcome this difficult situation.
People Also Ask
What can they take as I am being sued for a car accident?
If you are unable to pay the recovery amount and do not have a good income, they can take your house, car, or any other property.
What should you do if someone sues you for a car accident in California?
Read the received notice carefully, and get ready with all the documents supporting your position. Also, contact a lawyer at the earliest point.
Can I lose my house due to an at-fault car accident?
Yes, you can lose your house. It is applicable if you are unable to pay by other means.
He is an associate at Car Law Info. Also focuses on car accident litigation, personal injury cases and any damage compensation reporting with a special emphasis on car insurance defense.