What can we do to protect our assets if I was just notified by an auto insurer’s lawyer that we’re being sued for an accident for which my husband was at fault?

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What can we do to protect our assets if I was just notified by an auto insurer’s lawyer that we’re being sued for an accident for which my husband was at fault?

My husband rear-ended another car about 6 months ago. Our coverage for bodily injury is $25,000. We have quite a few assets (family farm, equipment, etc.) and we don’t want to lose. I don’t think the case has officially started. Do we still have an option to get things like that out of our name if we were to have to file bankruptcy? If so, how much time do we have and should we get a different lawyer or at least decide for ourselves she is the best for our case?

Asked on July 9, 2014 under Personal Injury, Kentucky

Answers:

Gregory Abbott / Consumer Law Northwest

Answered 6 years ago | Contributor

You should review the entire situation with a local bankruptcy attorney to determine your best course of action.  It most likely is far too late to try to re-title assets or otherwise try to move your property around to avoid this (potential) creditor.  How the assets are titled already, however, may well be important and, if jointly titled while husband is the only potential judgment debtor (IF this is the case...), any Judgment may become a lien against the asset but might otherwise preserve it...or not...  Bankruptcy (assuming you qualify to be able to file a bankruptcy), of course, will take into account those assets but a Chapt. 13 again may preserve them from being seized and, if filed prior to having a Judgment actually entered against Husband, would most likely end his being sued in regular court before it even begins.  He might still be sued in the bankruptcy court, as the potential creditor's attempt to establish the amount and validity of the debt, but defense in bankruptcy court is usually more favorable towards the debtor than in regular court and, depending upon the other details of any potential bankruptcy, the potential creditor might just drop the whole thing.  Only a careful, full review by a good local bankruptcy attorney can answer your specific questions.  You may also wish to consider increasing the limits on your insurance to avoid this sort of issue in the future.  It does not sound as if $25,000 is adequate to protect your assets.  Good luck.


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