Car accident with no assets?

Question

Just wondering. What would happen if someone got in a serious accident and the person got hurt and sued for a million dollars. But the person being sued had minimum coverage and no assets what so ever. Like a college student living on their own. Would their wages be garnished until it was paid off or until they die? Would it be sensible to have an umbrella policy or is that a waste of money?

Answer 1

It does depend upon the situation and the state. In my state your wages can be garnished at 30% until the judgement is settled.

A college student without assets doesn't need an umbrella policy. If you carry higher liability limits (100/300 or more) on your auto insurance you will most likely be safe. Usually the claim will be settled at the limits.

Answer 2

OK, well, if someone loses a suit, they get the judgement against them.   That judgement is good FOREVER.  

So if they are a college student, whoever will just wait until they graduate, and get a job, then their wages can be garnished until forever.  

If they are an 80 year old little old lady with no assets, the judgement is STILL good - until they die.  Effectively, they are judgement proof - no assets, no hope of future assets or wages.

Yes, it would make sense for someone with potential serious income to carry an umbrella liability policy.

Answer 3

Well if that happened you can kill a homeless person and use his/her identity.

Or maybe leave the country?

Answer 4

First, just because they sue for a million dollars doesn't mean that's what the judgement will be. But....for arguements sake, let's say that the actual judgement was for $1million. If you're someone who has no assets or doesn't have a great job, you'll just file bankruptcy.

You need to have enough insurance(liability limits) to adequately cover your assets. If you're worth $500k and have a good-paying job, you might want to consider getting an umbrella. But, if you're just a college kid with no assets to your name, you're not going to be able to find a company out there that'll write an umbrella policy on you anyway.

Answer 5

I would say that if you are that worried about it, yes. Other than that it would  be up to the courts. A lot of times they settle out of court.

Answer 6

Always have an umbrella policy. You could be in dire straits until the above mentioned scenario is paid in full even if it takes a lifetime.