Civil litigation
 

A young friend of mine was sued by someone for a personal damage / emotional stress claim in a civil litigation. The damage claim is approximately $50k but he only had $10k in the bank with no additional assets, if he loses the lawsuit or can no longer afford his attorney fees given that he doesn’t have enough money then what happens? Will he be going to jail because he can’t afford to pay even though this is not a criminal matter? What should he do once he exhausted all his money in the lawsuit? Should he file bankruptcy chapter 7? Any advice will be highly appreciated!

Re: Civil litigation
 

Hi Peter, sorry to hear of your friend's problem. This isn't a government website but it seems to have decent information, until someone who knows more about civil court judgements comes along it may help to have read. Bankruptcy as an option is mentioned, as is what a creditor can and can't take from the debtor in the case of non-payment. Also of interest may be the info that civil debt judgements no longer appear on credit reports.
https://www.credit.com/blog/how-long...-report-51696/

Re: Civil litigation
 

Need to check state specific laws.

Re: Civil litigation
 

He should contact a bankruptcy lawyer, they usually do consults and they can give some advice is bankruptcy is an option in his circumstances. Bankruptcy lawyers often do consults free of charge to discuss options.

If he has a lawyer currently he should also be asking his lawyer what his options are.

Bankruptcy is federal jurisdiction not state.

He wont go to jail over a civil matter.

Re: Civil litigation
 

I guess the first question is; does your friend plan on contesting or admitting to the case? If he chooses to admit, the total cost can be negotiated. He may have insurance that would cover something like this. If he wants to deny then it really depends on the facts of the case. Being up front and admitting he doesn't have money or assets will go a long way. Once the other side sees they are wasting their time, they may drop the matter. They won't get any money if he claims bankruptcy anyway.

Re: Civil litigation
 

If there is insurance then all the talking should be done via the insurance attorney.

Re: Civil litigation
 

They can enforce the judgment with either a lien or a wage garnishment usually. It will also likely hit his credit report - this will happen if a judgement is entered against him either way.

Re: Civil litigation
 

Thank you, in terms of the lien, is it assets in the US or there’s a way to impose alien on his assets in the UK? How long will the wage garnishment expire? Like 5 or 10 years?

Re: Civil litigation
 

Usually assets in the US only, international collections can get very complicated and expensive, but are not impossible.

Garnishment would be until full judgement is paid same as any debt collection lawsuit, even if it takes 50 years.

Re: Civil litigation
 

Garnishment is dependent on state.

Re: Civil litigation
 

This is all state dependent as already mentioned. I’m speaking in generalities.

Re: Civil litigation
 

I was once sued for $1 million in a civil suit. If he only has $10k that will soon be eaten up in lawyer fees and going to court with cost more than that. My lawyer estimated preparing for court and the hearing would run $40k. Fortunately I had insurance and they settled with the guy for $3,500. By that time my insurance had paid out over $10k in lawyers fees. Settling was cheaper than going to court.

Re: Civil litigation
 

Seems if he lacks the cash to really fight, is likely to lose, and appears to have no assets, seems letting the other side win by default, the file for bankruptcy protection would be the most economical way.

Granted certain types of judgements can't be discharged but a lot of judgements can be.

Re: Civil litigation
 

With all due respect, I would argue that that is the second question. The first question is "Does he have any liability insurance?" If he does he should notify his insurers and they will likely handle the entire thing.

Generally speaking, the are two reasons to sue someone in civil court - they have assets, or they have insurance. Home owner's insurance usually comes with fairly hefty liability coverage, and I suspect that renters insurance may have a smaller sum in respect of liability.

​​​​​​If he has no liability insurance, and few assets, then I would suggest that retaining a lawyer to explain that to the plaintiff might be a way out of the predicament, as unless the plaintiff is an idiot, or a vindictive a-hole (either of which is possible :(), he is just going to run up legal and court fees that he'll never recover.

Re: Civil litigation
 

+1 .....