YouTube Video-Bankruptcy After Car Accident: Options and Solutions

Today’s blog post is a summary focused on a video from my YouTube channel! The video is about bankruptcy and car accidents, and how each is affected by the other. Both Chapter 7 and Chapter 13 bankruptcy will be affected because of a car accident. So let’s review some of the issues.

Can Bankruptcy Be Filed Because of a Car Accident?

Let’s say you were in a car accident, and the other driver’s damages are way more than your insurance covers. What happens next? For example, suppose the damages to the other vehicle were $25,000, but your insurance policy only covers $10,000. You could be sued for the $15,000 difference. The common issue in this scenario is that people tend to ignore the lawsuit, but that only creates more problems.

Failure to take action once the judgment is entered will result in a suspended license. If you are caught driving with a suspended license, additional court fines can’t be wiped out in bankruptcy, and even jail time is possible! If you are on probation, that is a violation and it’s straight to jail. I discuss the lawsuit process in this blog post. However, bankruptcy can be a solution.

Myth Busting That Bankruptcy Can’t Be Filed

As a bankruptcy lawyer, I always hear certain myths when it comes to bankruptcy, even the law in general. One of those is that bankruptcy won’t wipe out a car accident judgment. That’s not true! Are there exceptions? Sure, there always are, and in this case, there’s an exception for car accidents because of a DUI (Driving Under the Influence) whether it’s Chapter 7 bankruptcy or Chapter 13.

I wish to point out that most civil judgments can also be wiped out in bankruptcy. I say most because not all debts can be discharged in bankruptcy. However, it’s been my experience that debt collectors, who are shady, to say the least, and probably violate the Fair Debt Collection Practices Act (FDCPA) more than not, do like to make the claim that judgments are non-dischargeable debts. While immigration is a hot topic issue now, I do know that debt collectors have always made the claim that if debts aren’t paid, they could be deported. That’s also a false claim. Debts are civil issues, not criminal issues.

• Understanding Nondischargeable Debts in Bankruptcy

While you cannot wipe out the debt related to a DUI, you can still file for bankruptcy to eliminate other debts, like credit cards or medical bills. This could provide you with the fresh start you need and deserve whether Chapter 7 or Chapter 13 bankruptcy because of the additional debt because of the accident. It will also prevent your driver’s license from being suspended.

In closing, please, let’s all be responsible drivers. Texting and driving can have devastating consequences, including severe injuries, if not death, to yourself or others. So, put the phone down and focus on the road!

I hope this video helped! If you have any questions about bankruptcy or car accidents, please post them in the comments section of the video.

Please stay safe on the roads and take care of yourselves!  ✌️

Need to look for prior blog posts or other categories? Click the links below:

• Bankruptcy
• Insights & Analysis

Colleges and universities can purchase my bankruptcy law textbook directly from Routledge Publishing. For paralegals and students buying single copies, you can do so via Amazon books. To access my YouTube channel, click this link. Archives can be found via this link.

Remember, the information posted should be used for information purposes only and should not be considered legal advice.