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John, Attorney
Category: Legal
Satisfied Customers: 697
Experience:  Trial Attorney, licensed in FL, GA, & AL. Rated 10 / 10 by avvo.
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My husband is being sued for an auto accident. If we end up

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My husband is being sued for an auto accident. If we end up owing more than our insurance pays, can we file bandruptcy? We own our home (it's very small - 900 square feet or so), have two vehicles (one is 8 yrs old and the other is 13 yrs old). We have no money in savings and, have debt of around $20,000 (credit cards, loans, etc.). We both work and our annual income is around $40,000.
Plaintiff's attorney's offen settle for insurance policy limits, but insurance carriers have to warn you that an excess jusdgment and thus personal liability is possible. In your situation, you can file bankruptcy to protect your interests. You should also make sure your attorney is doing everything possible to limit your personal responsibility. Plaintiff's attorneys often do assets checks to decide whether to go after people personally, as a judgement is worthless without an ability to collect. It is a possible, but unlikely secnario.
Customer: replied 8 years ago.
We havn't hired our own attorney. The Allstate lawyers are the only ones involved at this point. Should we hire an attorney about our case or just try to file for bankruptcy?
The Allstate lawyer represents you. He is hired by Allstate to do so, which sometimes creates a bit of a conflict of interest if the lawyer is deferring to the insurance company and not you. You are allowed to hire your own attorney, but same is not required. I would sent that attorney a letter that states:

Thank you for your representation. I understand that you are representing us and were retained by Allstate to do so. I appreciate your representation thus far. It is my understanding that the Plaintiff may seek a judgment in excess of our policy limits and we do not have the resources to do so and are considering bankruptcy, and other options. please protect our interests in this regard as best as you are able and advise us as this issue becomes heated. Please also ask the Plaintiff's attorney if he has an interest/design to seek an excess verdict and collect from us and let me know the response. We might consider allowing an excess judgment if he will afree not to execute and will hire additional counsel if need be.

Please settle this matter for policy limts and end this misery for us.
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