If you are being sued, you may be worried about the possible consequences of this legal process and how much you may end up losing because of the lawsuit. If so, personal injury lawyer Pendergrass wants you to know that you risk losing everything from bank accounts and wages to real estate and vehicles. Consult your lawyer to understand precisely what is protected in a personal injury lawsuit in your state.
What Is Protected from a Lawsuit?
Your Home
Having a homestead exemption may prevent your creditors from seizing your home to collect what you owe them. However, this only works if the exemption amount is less than your home equity. Otherwise, a creditor may attach a judgment lien to the property and force a sale. Once the house sells, you would get any surplus equity once the creditor has the money to cover the debt.
Retirement Assets
If your retirement assets are in a pension or retirement plan governed by federal law, these assets may also be protected. This law covers 401 (k) and pension plans but IRAs may have varying levels of protection. Some or all of the cash value of a life insurance policy may also be protected.
State and Federal Benefits
Benefits paid through direct deposit such as Veterans Administration or Social Security benefits are usually protected from collections due to lawsuits.
Basic Transportation
If your personal vehicle is worth less than a certain amount, you may be able to retain it. The same applies to clothing, appliances, household furnishings, and other items needed for you to earn a living.
Basic Income and Deposit Account Balances
You may be protected from destitution by state laws that cover a certain amount of your bank account balance from being seized by creditors. You may also have some of your wages protected from creditors by federal law. Your state’s laws may be even more protective in this sense.
Protect Your Assets Before You Get Sued
It is never in your plans to get sued. However, the unexpected can happen. You can be in a car accident, an old tree from your property can fall on your neighbor’s roof and damage it, your dog may one day decide to bite a passerby, or any other unforeseen scenario. This is why you should take some preventive actions before the unexpected happens since trying to quickly get rid of money and other valuable assets once you are sued may be considered fraudulent and nullified.
To be protected you may:
- Get a homeowner’s insurance policy with a high liability limit.
- Purchase liability car insurance.
- Get an umbrella insurance policy to further increase liability protection.
- Have a business insurance policy if you own a business.
- Place your assets in irrevocable trusts.
If you are sued despite all possible protections, go through your insurance. They will help you get the best possible attorney to help you with the lawsuit. If the suit is not covered by your insurance, hire a lawyer that specializes in that type of dispute.
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