I was involved in a minor car accident where I rear-ended a man who was joking with the police at the scene. Today, I learned from my insurance (Geico) that he is filing a claim for bodily injuries. I have coverage of $100,000 per person and $300,000 per accident, but I came across a story where someone was sued for $2.9 million due to “future pain and suffering.”
My mom suggested that I withdraw all my savings and say I used it to pay off a debt to my parents, so it looks like I have no assets if the other party decides to sue.
What should I do?
Just to clarify, this is my upper middle-aged, Asian immigrant mom’s advice. I live in California.
It’s understandable to feel concerned about the potential financial implications of a car accident. However, withdrawing all your savings to make it appear as though you have no assets can lead to legal issues, including accusations of fraud. Here are some steps you might consider instead:
Consult an Attorney: It’s crucial to speak with a personal injury attorney who can provide professional advice based on the specifics of your case. They can help you understand your rights and the potential outcomes.
Communicate with Your Insurance: Since you have insurance coverage that should help protect you, keep in constant communication with your insurer. They can guide you through the process and will represent you if a claim is made.
Document Everything: Keep records of the accident, any communications with the other party, and your insurance company. This documentation can be critical if a lawsuit arises.
Stay Calm: Many claims don’t result in lawsuits, especially if the other party is not severely injured. It’s essential to focus on the facts and not let fear drive your decisions.
Avoid Altering Your Finances: Different states have different laws regarding asset protection and fraudulent conveyance. Altering your financial situation could be risky and might not have the desired effect.
Your best course of action is to manage your situation transparently and legally, using professional guidance to navigate any potential claims.