Expertly Reviewed By: Serah Waweru, Esq., on April 12, 2023
Car accidents can result in serious consequences with long-lasting effects on the parties involved. This is particularly true if you are the defendant in a car accident lawsuit but have no assets. What are the legal implications of such a situation? Before we answer that question, let’s first define ‘assets’ in a car accident lawsuit.
From a lawsuit’s perspective, an asset is any valuable property or resource owned by an individual or organization which could be used to satisfy a debt or court judgment.
What Items Are Considered ‘Assets’ in a Car Accident Lawsuit?
The assets that may be at risk in a car accident lawsuit include the following:
- savings and checking accounts;
- real estate;
- personal property such as cars, jewelry, and artwork;
- investment accounts like stocks, bonds, and retirement accounts;
- wages and other income streams; and
- business assets such as inventory, equipment, and accounts receivable.
What Assets Can You Lose in a Car Accident Lawsuit?
The assets you may lose in a car accident lawsuit depend on the jurisdiction and unique nature of that particular case. That said, you may lose any of the assets mentioned above if you do not have adequate insurance to cover the claim against you.
What Happens When You Sue Someone With No Money?
It can be difficult to recover any court-awarded damages if you sue someone with no money. This is because if the defendant lacks any assets or income, you won’t be able to collect the money owed to you.
In this case, the court judgment may become unenforceable. As a result, you may not receive any compensation for the damages you suffered.
However, it is worth noting that the mere fact that someone has no money or assets does not automatically mean they are judgment-proof. Their financial situation could change in the future, and they could acquire assets or income you could then pursue to collect the judgment.
Additionally, some states may allow wage garnishment or liens on property, which could enable you to collect the money owed to you.
Ultimately, it is essential to consider the defendant’s financial situation before deciding whether to pursue legal action. It may be more beneficial to seek alternative forms of dispute resolution, such as mediation or settlement negotiations, which could result in a quicker and more satisfactory resolution for all parties involved.
What Happens if Someone Sues You for More Than Your Insurance Covers?
Again, in such a situation, you may be liable for paying the excess amount out of your own pocket. For example, if the damages awarded in a car accident lawsuit exceed the limits of your liability insurance policy, you may have to cover the difference.
In that case, an experienced car accident attorney can help defend against the lawsuit and negotiate a settlement with the other party.
If you are liable for damages that exceed your insurance coverage, the court may issue a judgment against you, and the other party may seek to collect from your assets.
Certain assets, such as homestead exemptions and retirement accounts, may be protected by state and federal laws. However, the degree of protection varies by state. Therefore, you should consult an experienced attorney to determine what assets may be at risk in your specific situation.
Bottomline: Is It Worth Suing Someone With No Money?
Yes and no.
The decision to sue someone with no money depends on the unique circumstances of the case.
If the other party has no assets or income, recovering damages awarded by the court may be challenging, and legal action may prove futile. This could result in additional costs and time spent pursuing the case.
However, it’s important to note that a person’s financial situation can change in the future, allowing them to acquire assets or income that can be used to pay off a court judgment. Additionally, some states permit wage garnishment or liens on property, which can facilitate the collection of money owed over time.
Alternative forms of dispute resolution, such as mediation or settlement negotiations, may also be worth considering. These options often lead to a faster and more satisfactory resolution for all parties involved.
Ultimately, it’s crucial to carefully weigh the potential costs and benefits of pursuing legal action against someone with no money. Focusing on other means of resolving the dispute, such as negotiating a payment plan or seeking alternative forms of compensation, may be more advantageous.