A friend of mine had her car totaled 3 months ago. She was parked and inside a friend of her's house when a motorist ran into her parked car. A police report was filed and completed (took 6 weeks), and the driver didn't have insurance. My friend has a lien through Toyota for her car and still owes 22,000. Somehow she had dropped her insurance to Liability from Full Coverage (Don't ask me how that happened). Both insurers are refusing to pay, the other driver who was at fault is refusing to pay or return phone calls, and the lawyer my friend has talked to told her to file bankruptcy and not bother with even suing him. My question is, is there anything else she can do? It seems pretty rough to be out a car, $22,000, and have to declare bankruptcy because of an accident caused by another driver.
Answer
I'm not sure why you think there would be anything she could do. The trouble with auto insurance is the people who don't have it are the people who also have no money to pay claims. The people who have it are protecting assets. So unless she thinks the at-fault party has assets to pay for her car, the other attorney is entirely right that she should not waste time and money suing him. Quite frankly, she's fortunate she lives in a country with a bankruptcy system. Because of it, she's really in pretty good shape. Think about it. If she sold the car she'd have to pay off the loan. She'd have no car and no debt. If she files for bankruptcy she is in exactly the same position. True, her credit will take the hit, but bad credit is the result of poor financial choices, and being underinsured is a bad financial decision. Not carrying uninsured motorist coverage is a huge financial risk and one that can easily ruin your credit if you lose. There are many places where she'd still owe the $22,000.
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