Many people involved in auto accidents think filing lawsuits against the responsible parties will solve all their problems. While you can collect compensation for most damages by suing or settling outside of court, there are some things that even a sympathetic judge can't help you with. Here are two problems that an auto accident lawsuit can't solve.
Pay Off Loan Balance
Cars depreciate at a ridiculous rate. According to some experts, vehicles lose up to 20 percent of their value during the first year of ownership. It's not unusual for people to quickly fall underwater (i.e. owning more on the vehicle than it's worth) on their auto loans, especially if they didn't put a large enough down payment on the vehicles.
Unfortunately, if your vehicle is totaled in an auto accident, the insurance company will only pay you the market value of the car. If that amount is less than the balance due on your loan, you will be responsible for paying the difference. Even worse, you cannot collect that balance from the liable party because the law states the person who caused the accident is only responsible for putting you back into the position you were in before the collision occurred, and that means only paying you what the vehicle was worth, not what you owe on it.
That doesn't mean you're completely out of luck. It may be possible to recover that money in other ways, such as ensuring you're compensated for all your losses, particularly those that people frequently forget about. For example, you can recover money for items that were damaged inside the vehicle (e.g. laptop, sports equipment) when the crash occurred. Discuss the issue with your attorney to determine other items you can get money for that may offset your losses.
Force the Defendant to Write the Check
Another problem a lawsuit can't solve is to force the defendant to write a check for the amount owed to you. When you win a lawsuit, the court gives you the right to collect money from the defendant. However, you have to actually go get the cash from the person or company. Insurance companies will face a lot of legal repercussions that can affect their business if they don't pay as required, so you typically won't have any problem getting money from them.
Regular people, on the other hand, are a different story. Some will pay to avoid the negative impact of collection activity, but others will do everything they can to skip out on you including filing bankruptcy. Thus, it's important to pursue your collection options as soon as you get your judgement to reduce the risk of the defendant bailing on you. For instance, you could put a lien on the person's home, which would require the individual to pay you before he or she could sell it.
For help managing your auto accident lawsuit or to get answers for other questions you may have, contact a local accident attorney.