If you are being sued for more money than you can possibly produce and cannot afford an attorney, is bankruptcy the best action?

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If you are being sued for more money than you can possibly produce and cannot afford an attorney, is bankruptcy the best action?

My friend was in a car accident 2 years ago and is now being sued for $50,000. His insurance won’t help him because, unaware to him, he was driving on a suspended license at the time of the accident. This is a young man, 22 years old, who’s had to pay for everything since high school. He spoke with an attorney and he wanted $1500 up front to work on the case. He simply doesn’t have the money. I was unable to find any pro bono lawyers in the area that take on that kind of case. Is there a solution?

Asked on July 2, 2012 under Bankruptcy Law, Indiana

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

A reasonable option--assuming that your friend believes that the case against him is credible, which means that he was at fault to at least some degree in causing the accident (because a driver is only liable to the degree he is at fault)--is to:

1) First, try to settle the case. Maybe the plaintiff will accept a lesser amount and/or accept a payment plan your friend can make.

2) If the above doesn't work, your friend could try to put pressure on the plaintif to settle by threatening bankrutpcy. If your friend has relatively little in the way of assets and income, it's a credible threat.

3) If your friend still can't settle, but there is any of the following (which could at least reduce what your friend might owe, even if doesn't let him escape liability entirely)--

a) doubt as to whether your friend was at fault

b) the chance the other driver was also at fault in causing the accident

c) doubt as to the extent or cost of injuries or damage the plaintiff is suing for (he can only look to recover an amount commensurate with injuries and damage)

--then your friend may wish to defend himself pro se (act as his own attorney) in court: he may win, or reduce the award, or the other side may err in some significant way.

4) If your friend ends up losing and having to pay and unaffordable amount, then bankruptcy is likely a good option. The reason to wait is one, you can always file later, so try other options first; and two, you want the other side to have an actual judgment--a court determined debt--which can be discharged in bankruptcy before filing.


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