If your negligence helped cause an auto accident, you may be under financial stress from various directions. How bankruptcy can help.
The Ways You May Be Hurting Financially
If you caused an accident, or helped cause it, your financial problems can include:
- If you were driving while uninsured, you could owe huge amounts of money for the bodily injuries to the other driver(s), passengers in the other vehicles and in your own, and to any injured pedestrians. You could also owe for property damage to the other vehicle, the vehicle you were driving if it wasn’t yours, their contents, and also for anything else that was hit, belonging either to a private person or business—such as a building stucture—or to a governmental entity—like highway signs and barriers.
- Even if you had liability insurance, it may not be enough to cover the injuries and property damaged, leaving you on the hook for potentially tens or even hundreds of thousands of dollars. Although you must have liability coverage to drive legally, the minimum required is often not enough to cover even a moderate accident, much less a very serious one.
- If your own vehicle got totaled or seriously damaged and you don’t have collision insurance coverage for it, you may well not have the money or credit to get a reliable replacement vehicle. If you have the minimum legally required insurance, that generally includes liability insurance (to cover your liability for the other drivers’ bodily injury and property damage), but not for replacing your own vehicle.
- If you did not have the legally required liability insurance and thus could not pay for the injuries and/or damages you caused, in many states you would get your driver’s license suspended until you paid it.
- You may also owe hefty fines for violating motor vehicle traffic laws, plus have to pay for traffic safety classes or some other kind of diversion.
- If you were charged with a serious violation of law, a traffic misdemeanor or felony—such as repeat driving under the influence, “hit and run,” or vehicular manslaughter—you have the financial challenge of paying for an attorney to defend the charge(s) against you.
Bankruptcy Helps by Discharging Most Debts Caused by Negligence
An accident caused by your negligence is one that happens simply because you were not careful enough. You made a mistake. You didn’t intentionally cause the accident, and you were not acting with sheer recklessness. Most auto accidents are the result of negligence.
If you owe a debt for bodily injury, property damage, or any other kind of damage to another driver, passenger, or pedestrian arising out of your negligent driving, that debt would be legally written off, or “discharged,” in bankruptcy. The person injured or damaged, or his or her insurance company, could no longer pursue you or your property for payment on the debt.
This is also true as to property damage to either a private person, company, or governmental entity.
The only kinds of vehicular debts that would not be discharged in bankruptcy are those in which the accident:
- was no accident, but instead the result of intentional and malicious behavior; or
- was caused by operation of a vehicle while intoxicated.
Bankruptcy Helps by Getting Back Your License Suspended for Violating the Financial Responsibility Law
If you had your driver’s license suspended for not paying a debt resulting from an accident while you were not insured as legally required, discharging that debt in bankruptcy would allow you to get your license reinstated. (This assumes that the debt is dischargeable because it wasn’t intentional or the result of driving while intoxicated.)
And filing a bankruptcy before such a license suspension would prevent that suspension from happening in the first place.
Bankruptcy Does Not Discharge Criminal Traffic Fines or Restitution But Does Usually Discharge Some Lesser Ones
In general, criminal fines, penalties, forfeitures, and restitution are not affected by bankruptcy law. That’s true with traffic misdemeanors and felonies as well.
But lesser offenses, usually called infractions, usually can be discharged. This can vary from state to state, or even locally, usually depending on whether these are considered to be “criminal” or not.
Bankruptcy Help You Fight Serious Traffic Criminal Charges by Discharging Your Other Debts
If you have been charged with a traffic felony arising from your accident, or a serious misdemeanor, you would be wise to retain an attorney to increase your chances of avoiding doing jail time. If you are already under significant financial pressure from your other creditors, you will likely have trouble concentrating your attention and your financial resources on hiring an attorney and dealing with the defense of the charges against you.
So it may be necessary to get relief from your other creditors by filing bankruptcy and discharging all or most of your other debts. Besides being then better able to afford an attorney, to the extent you will still end up owing criminal fines, diversion fees, restitution, and/or probation fees you would be better able to pay them. It is not uncommon to avoid incarceration by agreeing to pay certain fines and fees, so being able to pay these may be absolutely crucial.
If you owe a lot of money for bodily injuries and/or property damages from an accident that is not covered at all or not enough by insurance, you will likely be able to get out of those debts permanently by filing bankruptcy. If you are facing serious criminal liability, you may well be wise to file bankruptcy so that you can afford to defend the charges and to pay whatever criminal fines and fees you are ordered to pay. Either way, bankruptcy may well make a tough situation much more manageable. And will give you a much better 2015.