Who Pays Your Damages if the Defendant Files Bankruptcy?

For the most part, when you file suit against the other driver in your car accident, you’re dealing with an insurance company. Most drivers have auto insurance. It’s against the law to drive without insurance. And, while a few people drive without insurance anyway, most people don’t take this kind of risk. This means that your car accident lawsuit will almost always involve an insurance company. But, in the rare case where you have to pursue the driver personally, it can be very hard to collect on your judgment. Not only are you limited to the defendant’s assets, but, if the defendant files bankruptcy, you’ll be out of luck.

If you’ve been involved in a car accident and the other driver doesn’t have insurance, you need help. Call and talk to an experienced automobile accident lawyer in Houston.

What Kinds of Damages Will Your Houston Car Accident Attorney Demand?

The whole point of filing a lawsuit is to get paid for your damages. Even if your accident is minor, there is a chance that you’ll have experienced a loss. If you suffer serious injuries, your Houston car accident lawyer will fight to get you the compensation you deserve. To do this, they need to be able to prove your damages. Some of these will include the following:

  • Medical Bills: If you have to pay any medical bills, such as hospital bills, you can demand the defendant pay for it.
  • Lost Wages: If you miss a significant amount of time from work, the defendant may be held liable.
  • Property Damage: If your car is damaged or destroyed in the crash, you may have a claim for damages.
  • Pain and Suffering: Depending on how serious your injuries are, you may experience a lot of pain and mental anguish. These damages are meant to compensate you for that.

No matter how much you’re awarded in damages, if the defendant files bankruptcy, you may get nothing. It depends on whether or not the defendant’s insurance company is covering the damages or not.

If You Sue an Individual and The Defendant Files Bankruptcy, You May Get Nothing

If your suit is against the other driver’s insurance company, they’ll be liable for any damages awarded in court. As long as the other driver had a valid policy, their insurance company is legally required to represent them in court. They’re also required to cover any damages that don’t exceed the driver’s policy limits.

This means a few things. First, if the damages do exceed the policy limits, the defendant will be responsible for the excess. So, if their policy only covers $250,000 and your judgment is for $500,000, the driver will personally be liable for the extra $250,000. Second, your  car accident lawyer will have to pursue the defendant personally for these damages.

Getting paid from the insurance company isn’t usually a problem. Once the judgment or settlement is signed, you can expect to get your insurance check within a month or two. Your attorney will take their fee, pay any medical providers and lienholders, and then give you whatever is left. However, getting paid from the individual driver can be difficult. It can also take quite some time.

Texas is one of the hardest states to collect a judgment. You can’t go after the defendant’s wages. You typically cannot do a bank levy. And, if you put a lien against their house, you may never see a dime. Texas protects a large portion of a person’s home. And, in order to collect on a lien, you’ll have to wait for the defendant’s home to be sold.

If the defendant files bankruptcy, it will be even harder for you to collect on your judgment. Once they file bankruptcy, there is really nothing for you to go after.

Contact an Experienced Car Accident Lawyer in Houston Right Away

If the defendant files bankruptcy in the middle of your case, it can be very frustrating.. But if this happens, all you need to do is call an experienced car accident law firm in Houston. They will look to see if there are other defendants you can pursue. They can also check to see if they can file to get your claim taken out of the bankruptcy petition.

Either way, you do not want to try to handle this yourself. These sorts of cases can get very complicated, very quickly. You’re better off having an experienced car accident attorney by your side in case things get hairy.

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