A car accident can be a traumatic event even when you are able to walk away without serious injury. Of course, that does not mean you will necessarily escape the crash without consequence. The other driver, or even a passenger who was involved, may turn around and file a personal injury lawsuit against you.
If you have been served with a lawsuit–or even suspect that such a lawsuit is forthcoming–you need to take the matter seriously. You also need to be proactive. The first thing you need to do is contact an experienced Atlanta car accident lawyer who can take a look at the situation, advise you on a course of action, and help you learn more about car accidents in Atlanta, Georgia. A personal injury lawsuit is not the sort of thing you should try to deal with on your own. Nor can you necessarily rely on your auto insurance company to take care of things for you.
What Do You Stand to Lose?
Understandably, the first thing on your mind when someone sues you is, “What can they take?” Even if you believe that you were not legally responsible for the car accident, a judge or jury might not believe you. So if your case goes to court and you lose, what do you actually stand to lose?
If the person suing you only sustained minor injuries or property damage, then you may not lose anything at all, assuming you are current on your auto insurance. As you know, Georgia law requires all drivers in the state to carry insurance. This is liability coverage expressly meant to cover any losses you cause to someone else as the result of an auto accident. Indeed, your insurance company will often even pay for a lawyer to represent you in any lawsuit.
The problem is that auto insurance only provides a limited amount of coverage. Most of us only choose to purchase the minimum amount of coverage mandated by state law. As of 2024, those minimums are as follows:
- $25,000 for personal injury to one person in an accident;
- $50,000 for personal injury to two or more persons in the same accident; and
- $25,000 for property damage.
So let’s say you cause a rear-end accident and the person in the other vehicle incurs $8,000 in medical bills and $2,000 in repair costs to their car. In that case, your auto insurance should cover everything. While your premiums may go up, you will not suffer any direct out-of-pocket losses as a result of being sued.
But once you exhaust your insurance coverage, however, you can be held personally liable for the amount of any excess judgment. Say that person injured in a rear-end accident has $40,000 in medical bills. Your insurance policy will only cover $25,000 of that amount. The victim could therefore demand you pay up the remaining $15,000 out of your own pocket.
Going After Your Property
One thing to keep in mind is that a civil judgment in a personal injury lawsuit is not self-enforcing. In other words, the judgment is essentially a piece of paper signed by a judge declaring that you owe the plaintiff money. The plaintiff then has to take action to collect on that judgment, if not from your insurance company, then from you personally.
There are a few different legal ways this can happen. The first is garnishment. This is when the person holding the personal injury judgment seeks payment from someone who either holds your money or owes your money. For example, a judgment creditor can file a garnishment with your bank and seize money directly out of your checking account. Alternatively, the creditor could file a garnishment with your employer and take a portion of your wages each week.
The creditor can also file what is known as a writ of fieri facias, which is a lien on any real property you own within the State of Georgia. This lien allows the local sheriff to seize the property and sell it at auction to pay off the judgment against you.
Is Bankruptcy a Possibility?
Some car accidents lead to substantial jury awards, often running into six and seven figures. This is particularly likely to happen when the victim was either killed or sustained catastrophic injuries in the car accident, such as permanent paralysis. And while it may seem just to the court to award $1 million or more in damages, what happens when you simply do not have that kind of money?
Unfortunately, you may end up having to file for bankruptcy. Bankruptcy is governed by federal law and it allows a debtor to seek a discharge of any unsecured debt they owe. A discharge does not exactly eliminate the debt. Rather, it relieves you of the legal obligation to repay it.
Many personal injury judgments arising from car accidents can be discharged. (There are some exceptions, notably accidents caused by drunk driving.) The good news is that in a bankruptcy proceeding, you are allowed to keep certain exempt assets from your creditors. The bad news is that any non-exempt assets are typically liquidated and used to pay back your creditors as much as possible before you receive a discharge.
Exploring Other Options
While a car accident lawsuit can theoretically lead to bankruptcy or financial ruin, the reality is most personal injury claims are resolved out of court. Most plaintiffs are not eager to fight a long battle in court. They simply want to get paid what they can so they can move on with their lives.
Indeed, in many cases you will find the injured party will agree to release you from all claims–meaning you will not be sued or face the loss of your personal assets–if your insurance company simply agrees to pay out the limit of your policy. In fact, if your insurer refuses to pay such a claim in bad faith and a court later issues a larger judgment against you, you can actually sue your insurance company for their failure to protect you.
Once again, you should not rely on an insurance company to have your best interests at heart when it comes to a lawsuit. You need advice from a qualified Atlanta car accident lawyer who is legally and ethically obligated to protect your interests. Contact a GA car accident attorney today or call our car accident law firm at (404) 800-6762 to schedule a free case evaluation and learn more about car accidents in Atlanta, Georgia.