This page was written, edited, reviewed & approved by Emil J. Fleysher following our comprehensive editorial guidelines. Emil J. Fleysher, the Founding Partner, has 15+ years of legal experience as a bankruptcy attorney. Our last modified date shows when this page was last reviewed.
Are you facing a lawsuit after a car crash? Or are you hurt and trying to get paid? As Florida bankruptcy attorneys, we offer advice about Florida auto negligence lawsuit judgments from a bankruptcy attorney's perspective.
Florida ranks 10th in the nation for serious car crashes. In 2019, over 3,000 people died in Florida accidents. Even worse, Florida ranks 6th for uninsured drivers. About 20% of Florida drivers have no insurance at all. Being a "No-Fault" state means even insured drivers might not have bodily injury coverage.
After bad accidents, huge debts often push both hurt people and at-fault drivers to file bankruptcy. You need to know your options to protect your money and future.
Most Florida drivers have only the minimum legal coverage - just $10,000. Many skip better coverage because it costs too much. This risk puts their financial future in danger when someone files a personal injury case against them.
In serious car crashes with injuries, medical bills can be huge. When the at-fault driver has bodily injury insurance, it helps cover the victim’s medical bills within the policy’s limits. But what if there's not enough coverage?
Without good insurance, the injured party must pay their medical bills. They only get money back if they have "uninsured motorist" coverage. This often forces both sides to think about bankruptcy, especially when there's a large balance owed after an accident.
Uninsured motorist coverage lets the injured person get help from their insurance when the at-fault driver lacks good insurance. The victim's insurance pays them and then sues the at-fault driver through a process called "indemnification."
Without this coverage, the injured person must try to get money directly from the at-fault driver. This usually means filing a personal injury lawsuit and getting a money judgment from the court. However, collecting this money can be hard if the defendant has few assets.
A personal injury attorney helping the injured party faces big challenges in these cases. The personal injury lawyer must find the best way to help their client recover damages for their personal injury claim. They might target the car owner or look for other sources of payment.
Florida has a special law called the "dangerous instrumentality doctrine." This law lets the injured person sue both the driver who caused the crash and the owner of the motor vehicle. This applies if the owner permits to use the car.
For example, if you lend your car to a friend who causes a crash, the injured person can sue both of you. Courts view a car as a dangerous tool that owners should control to prevent accidents. You could be held liable for someone else's wrongful act in your car.
Personal injury lawsuits often target vehicle owners based on this rule. This happens especially when the driver has no insurance or money. It adds another layer to Florida auto cases from a bankruptcy attorney's perspective.
When an insurance company sues an at-fault driver and wins, it gets a judgment. This money judgment gives them the power to:
These judgments often reach tens or hundreds of thousands of dollars. Your license stays suspended until you pay the judgment, make a payment plan, or file bankruptcy to discharge the debt.
Auto accident debts can be eliminated through bankruptcy discharge in both Chapter 7 bankruptcy and Chapter 13 bankruptcy. This is key for anyone struggling with such a judgment, as bankruptcy can offer major relief from these debts.
When your auto case meets bankruptcy, you need to understand the court process. The Bankruptcy Court is a special federal court that handles all bankruptcy filings. It works differently from regular courts.
During your bankruptcy filing, the bankruptcy judge reviews your petition. They decide if your auto negligence judgment can be discharged. Most car accident judgments qualify unless you were drunk driving or caused harm on purpose.
The process starts when your bankruptcy lawyer files your bankruptcy petition. This filing creates an automatic stay under bankruptcy law. The stay stops all collection efforts against your assets. For those facing Florida auto judgments, this means quick relief from wage garnishment and license suspension from a court order.
If you caused an accident without good insurance, talk to a local bankruptcy attorney about your options. A lawyer who knows both auto cases and bankruptcy law can help choose the best path.
Your options usually include:
Besides the automatic judgment, filing for bankruptcy may help you eliminate other unsecured debt. This includes credit card debt, hospital bills, medical bills, personal loans, and car repo deficiencies. This broader approach helps fix your whole financial situation, not just the auto judgment.
From a personal injury attorney's view, bankruptcy filings by at-fault drivers create big challenges. When a defendant files for bankruptcy during a personal injury suit, getting paid becomes much harder.
Personal injury attorneys must quickly file a claim in bankruptcy court to protect their client's rights. They may file a special proceeding if they believe the debt should not be discharged due to how the injury was caused.
Many personal injury attorneys work with bankruptcy attorneys to help their clients get personal injury recoveries. They might negotiate partial payment, pursue claims against insurance policies, or look for other liable parties with assets.
The protections from the bankruptcy code are strong and nearly absolute. As experienced Florida bankruptcy lawyers, we make sure your rights stay protected during and after your case.
We once represented a client who GEICO sued after an accident. Our client was at fault and had poor coverage. After reviewing his personal injury case and finances, we decided Chapter 7 bankruptcy was his best option.
After filing, our client received a bankruptcy discharge from the bankruptcy court. However, GEICO's attorneys kept trying to collect. They ignored bankruptcy law. They even got a judgment and suspended his license. This happened despite the debt being properly discharged. We sued GEICO and its lawyers and won a significant judgment for our client.
The Supreme Court has made key decisions about how auto negligence judgments work in bankruptcy. These rulings guide how bankruptcy attorneys handle these cases.
In one major case, the court ruled that only debts from deliberate acts to cause injury cannot be discharged. This means most regular car accident judgments can be discharged unless they involve drunk driving.
Another important ruling made clear that creditors have no such right to pursue the collection of discharged debts. This applies even if state law might allow it. Once your auto judgment is discharged, the insurance company has not such right to keep pursuing you for payment.
The relationship between bankruptcy and personal injury claims is complex. Here are the key points:
For injured parties: If you get or expect a personal injury settlement and file for bankruptcy, that money may become part of your bankruptcy estate. Florida law does provide exemptions that may protect some of your personal injury recoveries.
For at-fault drivers: If you face a personal injury lawsuit or judgment, bankruptcy can usually discharge your liability. In some cases, like drunk driving, it may not be dischargeable.
Timing matters: The bankruptcy court pays close attention to when settlements happen compared to when you file for bankruptcy protection.
Most auto negligence judgments can be discharged in bankruptcy. But some situations make a debt nondischargeable. You need to know these exceptions when thinking about bankruptcy.
The most common exception is for debts from drunk driving. If the injury was caused by driving while intoxicated, the debt cannot be discharged in any bankruptcy.
Another exception involves willful and malicious injury to a person or their property. This means more than simple carelessness. There must be intent to harm or reckless disregard for the likely results of your actions.
Your insurance policy plays a key role in auto negligence cases. Many Florida drivers don't know these important facts:
Insurance companies must defend their policyholders up to policy limits. When damages go beyond these limits, you may be personally responsible for the difference. This is when many people think about bankruptcy.
When a defendant files for bankruptcy during a personal injury lawsuit, it triggers a specific legal process. The automatic stay immediately stops all lawsuit activity. No depositions, hearings, or trials can continue without the bankruptcy court's permission.
When someone files a personal injury lawsuit after a car accident, several steps typically happen:
At any point, if the defendant files for bankruptcy, the automatic stay stops the lawsuit temporarily. The bankruptcy judge will then decide if the debt can be discharged.
When dealing with auto negligence judgments, a person files for bankruptcy to find relief from overwhelming debts. There are two main bankruptcy options to pay creditors: Chapter 7 and Chapter 13.
Chapter 7 Bankruptcy: This is called "liquidation" bankruptcy. In this process, several actions take place to handle your debts. Some non-exempt assets may be sold to pay creditors. However, most people get to keep all their property. The entire judgment debt is usually wiped out in about 3-4 months. This means the injury caused by the accident and resulting debts can be discharged quickly. Chapter 7 is often the best choice if you have a low income and few assets.
Chapter 13 Bankruptcy: This option involves repayment plans lasting 3-5 years. You pay back part of your debts based on your income and expenses. The court issues a payment plan that sets how much you must pay each month. This allows you to keep your property while paying off the injury caused debts over time. Chapter 13 is better if you have a regular income and want to protect your assets.
Your choice depends on your income, assets, and personal situation. A bankruptcy attorney can guide you through these options and help you pick the right chapter for your case.
Married couples facing auto negligence judgments have special issues to consider. If only one spouse was driving, you might have options to protect the other spouse's assets and credit.
In some cases, only the spouse who was driving needs to file for bankruptcy. This approach can save the other spouse's credit score. However, in Florida, marital property might still be at risk, depending on how it's titled.
For married couples with joint debts beyond the auto judgment, filing together might make more sense. This lets you address all financial issues at once. We carefully analyze each situation to recommend the best approach.
Medical expenses play a big role in bankruptcy decisions after auto accidents. For injured parties, overwhelming medical bills often drive the need for bankruptcy protection. These bills can quickly exceed insurance coverage, especially with serious injuries.
For at-fault drivers, the injured party's medical expenses form a large part of any judgment against them. Medical bills, including those from auto accidents, are generally unsecured debts that can be discharged in bankruptcy.
In Chapter 13 bankruptcy, medical expenses are typically classified as nonpriority unsecured debts. This means they get paid only after secured and priority debts are secured and priority debts are secured in your repayment plan. Often, unsecured creditors receive only a small percentage of what they're owed.
If you have questions about auto negligence defense, personal injury settlement options, or bankruptcy, contact our office to speak with a local bankruptcy attorney. We've been helping Florida clients get debt relief since 2010.
As experienced bankruptcy lawyers, we can help you understand your options for dealing with personal injury lawsuits and judgments. We've filed thousands of bankruptcy cases and would be happy to see if bankruptcy relief is right for you.
Our attorney-client relationship begins with a free consultation where we'll review your specific situation. We'll explain how bankruptcy law applies to your case and what property you can protect through exemptions.
Don't let an auto negligence judgment ruin your financial future. With the right legal strategy, you can solve these problems and move forward. Contact us today to learn how we can help you traverse these tough legal waters.
Emil specializes in consumer bankruptcy, debt settlement, and mortgage modification, offering a holistic approach to solving mortgage and debt problems. Emil listens to clients, understands their circumstances and goals, and helps them make the right choices by presenting all options and contingencies.Â
He is dedicated to helping South Floridians regain their financial freedom from overwhelming debt caused by high interest credit cards, bad mortgage loans, and uninsured medical expenses.
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