If you’re involved in a dispute with another party, you may be considering filing a suit against them. There are many possible reasons to sue someone, such as to settle after an accident or because of injuries. Before you decide to sue the other party, it’s important to think about whether they have the financial means to pay damages. In most cases, you’re not recovering from an individual or business. Rather, you’re recovering from their insurance provider. Still, there are instances when the other party does not have enough coverage, or has no insurance at all. In these instances, that party can be held personally liable for damages.
Having a judgment in your favor is the first step, but it won’t do you much good if the other party can’t pay. In order for you to collect, the other business or individual has to have property, money in the bank, or income.
Collecting After a Judgment
After you go to court, if the judgment is in your favor, you’ll be allowed to use different collection techniques in order to collect the amount that the court agrees is owed to you. If the other party doesn’t pay voluntarily and promptly, you can use the following methods for collecting the settlement:
- Garnishing wages – When the other party can’t pay you the settlement all at once, you have the right to collect a portion of the settlement from their wages each month. The percent of wages you are allowed to collect varies from one state to another, but if the other party has low wages or is living on Social Security, welfare or unemployment, you won’t be able to take a portion of their income.
- Placing a levy on property – It’s possible to place a levy on property such as vehicles, real estate, investment accounts or bank accounts in order to collect your settlement. By recording your judgment with the local recorder’s office, you will receive all or part of your settlement if the property is sold. Some assets may be protected from levies, such as items that the other party needs to be able to work.
- Business income or assets – Items owned by a business may be sold to settle a judgment. A business that is bringing in an income may have to give up part of its income in order to pay money that is owed to you.
- Future income or assets – If the other party currently doesn’t have much in the way of income or assets, that doesn’t mean that his or her circumstances may not change in the future. Judgments continue to be collectible as long as they aren’t paid, but they do have expiration dates. Renew before the expiration date in order to get more time to collect.
Alternatively, you can also pursue compensation via uninsured or underinsured motorist coverage if you have it. If you don’t have uninsured or underinsured motorist coverage, it’s certainly something worth looking into.
How Uninsured and Underinsured Motorist Coverage Works
Uninsured (UM) and underinsured (UIM) motorist coverage is designed to cover medical expenses, lost wages, and other injury related expenses if the other driver is not properly insured or takes off after an accident. There are currently 22 states that require drivers to have underinsured or uninsured motorist coverage (Connecticut, Illinois, Kansas, Maine, Maryland, Massachusetts, Minnesota, Missouri, Nebraska, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Oregon, Rhode Island, South Carolina, South Dakota, Vermont, Virginia, Washington D.C., West Virginia, and Wisconsin).
Underinsured and uninsured motorist coverage are similar, but are two distinct types of coverage. Uninsured coverage protects you in an accident with an at-fault driver that doesn’t carry liability insurance. On the other hand, underinsured motorist coverage protects you in an accident with an at-fault driver that has insurance, but does not have enough to cover the damages caused by the accident. UM/UIM coverage can be purchased separately, but are often packaged together.
The cost and coverage varies from state to state and from policy to policy. Generally speaking, uninsured and underinsured motorist coverage will cost an additional 5% from your current annual auto insurance premium. Coverage can range anywhere from $5,000 to over $1 million depending on the coverage level you select. Despite being an extra cost, the additional charge on your premium payment can be well worth the spend. You will no longer have to worry about where compensation will come from if you’re injured in an accident due to the negligence of a driver with no money and no insurance.
Deciding Whether to Sue
Before you sue another party, it’s important to consider whether there’s any chance the other party might countersue and whether you have the money to cover the attorney’s fees while you are waiting for the case to be settled. Another thing to consider is that there may be a lot of time and money involved while the lawsuit drags on. You may find that filing a lawsuit is emotionally draining.
It’s especially important to consider whether the other party has any money to cover a settlement, or whether there is a good chance they’ll make more money in the future. A person who has low or limited income or who is disabled may have nothing to give you, and a person who is struggling financially may file bankruptcy in order to obtain protection against a lawsuit.
In some cases, an attorney may not charge a fee unless successful. In this type of case, the lawyer will evaluate your situation and how likely it is that the other party is able to pay. Fill out the form on this page in order to contact Taos Injury Lawyers for more information and to talk to an expert about your situation.