When a plaintiff presents a claim against a defendant because of some harm that they had to ensure, a lawsuit is brought in a court of law where the plaintiff wants some or other remedy for the damages.
The plaintiff may be successful but there are some cases where you can lose everything in the lawsuit and where the court wasn't able to enforce the defendant to pay for the damages.
You can lose an awful lot
There are millions of lawsuits filed every year in the United States and legal proceedings and judgments can have unexpected consequences, making the plaintiff lose more than ever. In fact, you can lose a lot in a lawsuit, and that includes your house.
Yes, some states offer some protection, while others offer no protection at all on your house. Not only that, if you lose in court, you will also have to disclose all of your assets and you can even end up losing more than just your house.
Lawsuits – don't be a loser
The most common type of liability lawsuit where you stand to lose assets is one resulting from an accident. The process of pursuing a personal injury claim isn't simple and if you lose a car accident lawsuit, it could be because you opted not to be represented by an attorney.
There are court filings that have to be done in a certain way and there are deadlines to meet. Without an experienced lawyer, you can miss out on important paperwork and strategies and lose a lawsuit.
Joe Stephens is a board-certified personal injury attorney who has recovered millions for his clients. The law firm, being one of the renowned in Houston, can work on your lawsuit too to ensure you aren't a total loser and that you are awarded the biggest settlement possible.
Your life savings
Savings accounts are often sought after in a lawsuit, and if you or even your teenage child wrongfully caused a motor accident, it could mean the other party pursuing your assets. Retirement accounts such as IRS and 401(k) are protected from a liability lawsuit.
Investment accounts such as these individual retirement accounts do carry a certain amount of protection. If you lose a lawsuit, creditors may come for your assets, but if debt does force you to file for bankruptcy, your IRA, 401(k), as well as other retirement accounts, will, in all likelihood, be protected.
However, you need to bear in mind that these retirement accounts can still be vulnerable if you owe taxes, for instance.
Your car or your wages are vulnerable
Did you know that a creditor can win a lawsuit against you even if you are penniless? This is because the lawsuit isn't based on whether you can pay, but rather on the fact that you owe the money to the plaintiff. So even without any money, the court can decide that the creditor has won the lawsuit.
If you don't have money, creditors can take your property. They can take your car and if you don't have a car, they can put a lien on your house. However, if they want money, your wages can be garnished, meaning they take a portion of your paycheck even before you get paid.
However, if you are collection proof, the creditor can't take your assets or income, even with a judgment against you. Possibly a repayment plan to pay back the creditors will be put in place and then if you don't pay this, you could be in violation of the court order.