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Andrea, Esq.
Andrea, Esq., Attorney
Category: Legal
Satisfied Customers: 12554
Experience:  25 yrs. experience in family law, estates, real estate, business law, criminal defense, immigration, and employment law.
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My wife was involved in an auto accident 2 years ago. She was

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My wife was involved in an auto accident 2 years ago. She was at fault for running a red light. The accident was about medium in severity is the best way to describe it. The planitiff, whose car my wife struck in the accident, did go thru surgery for a neck injury and is 78 years old. Our insurance liability is 100K but the plaintiff is asking for more than our coverage limit.

The accident occurred in Indiana but we are residents of Michigan. As I understand it in Indiana it is a tort state and they can only go after my wife's assets and nothing we own jointly. The vehicle involved in the accident is in my name only, not hers. She has little in the way of monetary funds in her name except for her 401K, valued at approximately 200K. The plantiff's attorney's is asking for half of the value of the 401k or 100K, in addition to the 100k the insurance company is already committed to put up. We have found out that 401K's are not eligble to be used to satisfy a legal judgement.

The case looks like it may now go to court and we are weighting out our options. Do we go to court or pay out half her 401k, leading to pentalies and tax consequencies equal to about 35% of the amount withdrawn? If she loses in a court case what avenues does the legal system have to satisfy the judgment if there are no funds available to satisfy the judgement? Can they garnish her wages? Would she be forced into bankruptcy? Do you have any knowledge of how these types of cases typically turn out? For example the court can force bankrupcty and this occurs 30% of the time or they garnish wages in 25% of these type of cases?

Any information that can help us may an informed decision as to how to proceed would be appreciated. We have been in contact with an Indiana attorney to represent our personal liablilty but he has been slow to respond and we have seeked counsel else where and everyone seems to be shying away from our case. We just want to get some answers so we can move forward. Thanks for your time.

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I am sorry to hear about your situation. The information you were given about a 401k being unavailable to satisfy a judgment creditor is correct and this is true of any type of retirement or pension fund. Therefore, there is no reason to incur the tax penalties and give the plaintiff's Attorney half of your wife's 401k, if he could not touch it in any event. Therefore, I would leave your wife's 401k intact.


A Court does not force a party into bankruptcy, or garnish a defendant's wages. It is totally up to the Plaintiff/ judgment creditor to ask the Court to issue a Writ of Garnishment in order for the plaintiff to be able to garnish your wife's wages. However, if that becomes too overbearing, your wife could consult with a Bankruptcy Attorney about filing a Petition under Chapter 7 of the Bankruptcy Code and if your wife's Petition is granted, the plaintiff's judgment will be discharged in bankruptcy and the plaintiff will be able to get only what your insurance carrier is offering as the limits of your policy.


As for why the attorney you retained to represent you on the excess portion not covered by your automobile policy is not being responsive, I cannot say because I do not know what he is thinking. I would suggest that you contact him by Certified Mail, Return Receipt Requested, informing him of the July 26, 2013 date and send a copy of your letter by regular mail. Ask your insurance Attorney if he can get in touch with the Attorney and find out what his situation is since he should be present at the status conference because many times the Judges will apply pressure to the parties to come to some type of settlement in order to remove cases from the Court's already cluttered trial calendar,





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