Need Advice on Subrogation and License Suspension
I posted about this issue yesterday, and you can find it in my history. Basically, my child’s father got into an accident while driving a car that I own, and it turns out there was no insurance on it. Over the weekend, I discovered a letter dated 1/31/2025 regarding a subrogation claim, stating that the state intends to suspend my license and that there’s $5.7k owed in damages. The letter didn’t clarify who is responsible for this amount, but I’m assuming it’s being pushed onto me as the legal owner. I reached out to them, but they were rude and unhelpful. I have a few questions:
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I asked who is accountable for the payment, and the representative said both my child’s father and I are responsible. She added, “the state doesn’t care who pays as long as it gets paid.” If it results in a judgment, will it affect both of our credit scores?
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I inquired what happens if I can’t pay, and she mentioned they would refer it back to the insurance company, who would decide on the next steps. I’ve heard that State Farm tends to sue in these cases. What is the process if they do sue? Can I defend myself by stating that I wasn’t the driver and transfer the responsibility to him?
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If a judgment is made and subsequently paid off, will that still appear on my credit report?
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As of today, 2/24/2025, my license isn’t suspended yet. How long does it usually take for that to happen?
I realize this situation is tough, but I’m seeking the best path forward, especially since I have no money. Currently, I’m on food stamps, have no assets, and am burdened with $4k in credit card debt. The representative mentioned that if I pay in full now, they could reduce the total by $1k. A payment plan would require about $1.4k down, which I could manage, but I can’t afford the monthly payments.
What should I do? Should I wait for them to sue me? Will my license be suspended by that time? If they do pursue legal action, will I still be able to arrange a payment plan then? Thank you for any insights!
I’m really sorry to hear you’re going through this. It sounds like a difficult situation, but let’s break it down and see if I can help answer your questions:
Responsibility for Payment: Yes, both you and the driver (your child’s father) can be held responsible for the debt since you were the legal owner of the vehicle. If a judgment is placed against you, it could affect both of your credit scores. In most cases, the person who is sued will be the one who ultimately ends up with a mark on their credit report.
If You Can’t Pay: If the debt goes to the insurance company and they decide to sue, they will likely file a civil lawsuit against you for the amount owed. In court, you could argue that you were not the driver, but since you were the legal owner, it may not free you from responsibility. If they win the suit, they could pursue wage garnishment or bank levies, depending on your financial situation and the laws in your state.
Post-Judgment Credit Impact: Yes, if there is a judgment against you and it is paid off, it could still impact your credit report for several years, even after the debt is settled. However, the impact may lessen over time.
License Suspension Timeline: The timeline for license suspension can vary by state. Often, it can take a few weeks to a few months after a judgment for a license suspension to occur. It may be worth checking with your local DMV or the agency involved for specific guidance on timelines.
What to Do Next:
– Consult Legal Aid: Since you mentioned you have limited financial resources, seek help from a local legal aid organization. They can provide free or low-cost advice specific to your situation. They might help you find options you weren’t aware of.
– Negotiate: If you can afford to put down some money (like the $1.4k), consider negotiating with them to see if you can set up a more affordable payment plan. Explain your financial situation clearly.
– Document Everything: Keep records of all communications you have with the state and insurance company. This can be important if you need to defend yourself later.
– Explore Financial Counseling: Look for community resources or credit counseling services to help you with your broader financial situation, which might ease some of your stress about the debt.
Make sure to stay proactive about this situation to avoid further complications. Good luck, and I hope you find a resolution soon!