I know you are inquiring about bankruptcy, but I want to give you some other suggestions before you file. First, write a letter to the collection agency disputing the debt and demand verification of the alleged debt pursuant to 15 U.S.C. 1692g (Fair Debt Collections Practice Act). Once you do this, the collection agency must cease all communications with you until they produce the required verification. Second, once they verify the debt you can generally negotiate the debt down to a fraction of what is actually owed - they will be particularly amenable if they know that there is a very real possibility that the debt will be discharged in bankruptcy. (I am not a bankruptcy lawyer but as a general rule auto accidents can be discharged provided that alcohol and drugs are not involved). Third, after you have negotiated the debt, set up a monthly payment plan with the collector. Debt collection agencies want the money and will bend over backwards to get money even if it is only a fraction of the $25,000.00 you allegedly owe.
Finally, I recall a Georgia Court of Appeals case that held that in the absence of a "bad faith demand for UM benefits," the insurer was not obligated to pay UM benefits. This would be an issue to explore with a lawyer as it would require filing a declaratory judgment action if no first-party bad faith demand was sent to the UM carrier. All in all, if you are considering filing bankruptcy purely because you can't come up with the $25,000.00, I would exhaust the other methods prior to filing for bankruptcy.
The response given is not intended to create, nor does it create an ongoing duty to respond to questions. The response does not form an attorney-client relationship, nor is it intended to be anything other than the educated opinion of the author. It should not be relied upon as legal advice. The response given is based upon the limited facts provided by the person asking the question. To the extent additional or different facts exist, the response might possibly change.
To obtain the precise advice you need, a full case review by an experienced bankruptcy attorney will be needed. While, as a general rule, auto accident damages are dischargable in bankruptcy, there are exceptions secondary to the circumstances of the car accident. and the extent of your culpability
Best wishes for a favorable outcome, and please remember to designate a best answer.
This answer is offered as a public service for general information only and may not be relied upon as legal advice.
I agree with Attorney Sinclair.
GENERALLY, such a debt would be dischargeable. However, there may be circumstances not stated in this very brief fact pattern that would indicate the debt might not be dischargeable.
Therefore, I echo Attorney Sinclair's sage advice: find competent, local bankruptcy counsel and bring all your accident paperwork and collection notices in for a review. You may be charged a consultation fee for the review and research necessary to give you a definitive answer, but the certainty should be worth the cost.
If you need further clarity, please email me at MICHAEL@MIRELAND.US Answers to questions are for general information purposes only and do not establish an attorney-client relationship. This is not legal advice, simply information. You SHOULD NOT act on this information without consulting a competent bankruptcy attorney in your area and providing ALL relevant information.
With the limited information you provide generally the debt owed to the insurance company should be dischargeable. If alcohol or drugs are not involved then there could be issues. So as already advised, seek the counsel of an attorney in your jurisdiction and provide them with all the facts.