Would I have to file for bankruptcy in regards to subrogation if j spent the settlement money and have no real assets,

UPDATED: Sep 30, 2022

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Would I have to file for bankruptcy in regards to subrogation if j spent the settlement money and have no real assets,

Let’s say I was involved in an auto accident. I got a
settlement and spent the money. Now my health
insurance wants their money back, but I don’t have it
anymore. I don’t have any real assets either. Will
they sue me? Will I have to file for bankruptcy?

Asked on October 6, 2016 under Accident Law, California


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

Legally, you are not allowed to be paid twice for the same thing(s), so if the insurer paid you, then you received a setlement for the same costs or losses for which the insurer paid you for, the insurer, not you, is entitled to the money. If you don't repay it, legally they could sue you--whether they will or won't depends on how much is at stake and whether they deem it worth their while. As for bankruptcy: that is an option, since bankruptcy works against debts like this, but it's also a drastic option, which affects your credit and life for years. If you are sued and end up liable for more than you can afford, consult with a bankruptcy attorney, to understand the process, the benefits, the costs, and the effects, before deciding what to do.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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