Liability Lawsuit

Sarah hit a pedestrian a while back driving at night. The person is now suing Sarah. Sarah is getting married, so what can she do to protect the few assets she has?

QUESTION: Sarah in Greensboro hit a pedestrian a while back driving at night. The pedestrian was on illegal drugs at the time, and the person is now suing Sarah. Sarah is getting married, so what can she do to protect the few assets she has? When they’re married, will her husband be responsible for her debts? Dave talks it over with Sarah.

ANSWER: You need to ask your attorney’s advice to be sure in North Carolina, but I don’t know of any state that will allow them to come after your husband’s assets. I don’t know of many ways to protect your assets. You may very well lose those, and if they were to win this lawsuit and it’s in excess of any insurance that you can get, it may bankrupt you because it might be that you owe $10 million or something, and it’s laughable that you would be able to pay that in most cases.

I’m not an attorney. You can ask your attorney’s opinion, but what knowledge I have of these things says that in most states, if you hit a pedestrian, you lose. You might win on the basis of they were too drunk to stay out of the road. I don’t know, and it’s just a freak accident, but you could spend $100,000 just defending this lawsuit. The person’s attorney is not after a 27-year-old newlywed with no assets. They’re after your insurance. They’re not stupid. They know you don’t have anything or they suspect you don’t. They’re after whatever the insurance is unless it’s vengeance and they want to bankrupt you. If they get a ruling for $2 million, your insurance company’s going to write a check for $100,000, and you’re bankrupt. If your attorney is skillful, this person may agree to accept an apology from you and the $100,000 from your insurance company, and that’s really probably all they’re going to get.

You don’t want to have a joint account. Any account that has your name on it suddenly becomes an asset. You have to keep everything very separate until this is settled. Do not put your name and his name together on anything.

You didn’t have enough insurance. You need more insurance. You don’t want to walk around with less than $1 million liability. If you had $1 million liability, you could pretty much be sure they’re going to work out something with your insurance company, and you’re going to walk away because that’s what your insurance was for. Then your attorney is not needed. Your insurance company’s attorney is needed at that point.

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