eli5 how does paying out sue money work?

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Theoretically you are sued for any amount of money that is more than you have in your bank account and other assets and the person who is suing you wins? How do they get that money? Like say you are worth $20,000 and they sue for $100,000 and win

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6 Answers

Anonymous 0 Comments

If you don’t pay anything, they take you back to court and the court makes a judgement against you, potentially including seizing assets or garnishing your wages.

If you have to pay more than you have right then, you’re bankrupt. You file for bankruptcy and most of your debts get renegotiated…there’s no real point in trying to claim money that doesn’t exist. More likely, you negotiate some kind of repayment plan.

Anonymous 0 Comments

Generally a lawyer will advise against suing someone who doesn’t have any assets to pay a judgment. That’s why, for example, if a FedEx driver hits someone they sue FedEx and the driver. FedEx has deep pockets to pay off a settlement or judgment.

In some cases if the person doesn’t have the full amount payment plans get worked out.

It’s often much more difficult to collect a judgment than it is to win one. Depending on the state certain assets like homes are protected so you could have a judgement against someone who doesn’t have the money to pay but lives in a multi-million dollar home.

Anonymous 0 Comments

Another factor is that motor and home insurance will cover you for your biggest risk – being responsible for someone getting injured by your driving or on your property.

Businesses and professionals should also have insurance for the main risks where they might have a big legal judgement against them (business liability, employer’s liability, professional indemnity).

Anonymous 0 Comments

Lawyers will generally first figure out how much the defendant can pay.

If it won’t make them enough money then they’ll pass on your case–they’re lying when they say they care about you and want to make you whole. If they did want to make you whole, they’d pass on their 30+% contingency fee.

They will then see how much insurance and assets the people they are going to sue have. They do not want to sue for much more than someone can pay because then the person will just declare bankruptcy and the lawyer won’t get their money.

In short, the best defense against being sued is to not have any assets, and lawyers are parasites on society.

Anonymous 0 Comments

If the person getting sued has insurance, the person suing will usually offer to settle at the limit of the policy (unless the person has a boatload of money)

If the plaintiff has a good case, insurance typically settles because otherwise, the insurance can have to pay the full amount of the claim, even if it is several times the insurance coverage.

Anonymous 0 Comments

I sue you for $100,000

I win and win 100,000

But you only have $5,000.

Well that’s mine now. But I can also take possession of some of your stuff. The judge can usually say what can or can’t be done. Like they won’t take your only car usually because the courts understand you need to get to work.

But your nice new TV? Mine. Your gaming PC? Mine.

Finally the court can issue a writ of garnishment. This basically says part of your paycheck is mine now. So if you make $20 an hour I might get $4 an hour of you working. Of course once you pay the debt it stops. But you will basically see your paycheck lessen.