My out of state colleagues, Mr. Larkin and Ms. Adams, mean well but they are not familiar with Florida's Financial Responsibility Act. The suspension of your license and motor vehicle registration has nothing to do with points; it has to do with a Final Judgment against you arising from a motor vehicle accident remaining unsatisfied for over 30 days.
To answer some of your questions: subrogation claims can be assigned, just like delinquent credit card claims. So, the collection agency may be representing the original insurance company for the other driver, or an assignee of that insurance company, or for all we know it has purchased the claim itself.
Before a judgment can be entered against you, you must be sued. You would have to be served with process, but just because you did not receive a Summons does not mean there isn't a case out there. If a driver/owner of a vehicle leaves the state or conceals themselves so they can't be served, then they can be served through the Office of the Secretary of State of Florida. Check out Section 48.171 Florida Statutes. You may very well have a judgment against you and not know it. If you were living at the address shown on your driver's license the last 2 years, or at the address shown on the crash report, you would have a basis to seek to have the judgment set aside and the service quashed. If you didn't report a change of address to the DMV, it would not be conclusive, as there is a vast difference between not reporting a change of address and concealing oneself. If you own property with due diligence you could be found. If you own a business you could be found.
Let us proceed with the concept that you haven't yet been sued. Well, the $3,700.00 is just a claim at this point. You are entitled to have a trial to determine who was at fault and the extent of the damage to the other vehicle. Florida is a "comparative negligence" state, which means that when determining the extent to which damage should bee allocated the relative fault of the drivers is taken into account. It is rarely a 100% situation. Even if the damages were $3,700.00, it is unlikely you would be found liable for the entire amount. Then, the Plaintiff would have to prove up the measure of damages.
What can you do if a judgment is entered against you? Well bankruptcy is an option, but for $3,700.00 it should be the last resort. Of course, if your credit is already bad, a BKC would clear up all your other bills and this claim also. But if your credit is decent, there may be other remedies. First of all, setting up a payment arrangement with the Plaintiff. They want money. Suspending your license does not get their money. The suspension helps if you are stopped for an infraction and the suspended license comes up on the computer. But I a filing cabinet of judgments that need to be shredded where the judgments are over 20 years old and some how or another the defendant was able to survive without getting their Florida license back.
If the Plaintiff does not agree to something you can afford, you can ask the judge in the case to set up a payment program for you. That doesn't mean something you think you can afford but what the judge things you can afford. It may still bee more than what you can do, in which event a BKC would be the next step. This provision is part of the Financial Responsibility Act. But you have another bite at the apple--at $3,700.00 the law suit would be a small claims case. Which means you would be summoned to court and have a mediation at a pre-trial conference.
Bottom line--you have options. Consulting with an attorney is a good first step to find out what has happened in court, if anything, and whether attorney involvement at this time is necessary.
PS Consider having the attorney review whether Progressive properly denied you coverage. Some times, the insurance companies will reconsider an initial denial.
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You may not always be aware that a judgment has been entered against you; perhaps you did not attend your court hearing, or the judgment was entered at a later time. Depending on the accident and the court’s judgment, you may have points assigned to your driving record. This could result in a suspended driver’s license. If you have been found at fault in an accident and are facing problems with your license as a result, contact an attorney as well as the DMV to discuss your legal options and how your driver’s license can be reinstated.
If they obtained a judgment against you it is just a matter of time before they attempt to garnish your wages or levy your bank account. Ms. Adams is correct that this could result in points against your driving record and ultimately license suspension. You could attempt to settle this debt on your own or enlist the help of a consumer collection defense attorney. To have your license reinstated you might also consider filing bankruptcy if eligible. I recommend you get a consultation with a bankruptcy attorney near you to learn what your options are for discharging this debt and reinstating your license.
While I would love to be your attorney and you may call my office any time to schedule a FREE consultation on California bankruptcy matters, the information provided herein does not create an attorney client relationship and is not a substitute for having a consultation with a bankruptcy attorney. It is important to have a consultation with a bankruptcy attorney as the information provided in this forum is limited and cannot possibly cover all potential issues in a given situation.