Legal Question in Bankruptcy in California

I recently received a Tort Action law suite in the amount of $25,000.00 from Progressive Insurance Agency for a car accident in 2006. I am unemployed and have been for 3 years and I can not afford to pay the amount. It has gone to collections and when I called the collection agency I was told that if I do not pay 33% of $25,000.00 in 1 week my divers license will be suspended. I was also told by the collection agency (Priority Collections, LLC.) that I can not file for bankruptcy. Is it true that I would not be able to file bankruptcy? I need my license to keep looking for work and to be able to take odd jobs at a moments notice. I need it to survive basically and I surely can not afford to pay $25,000.00. So my question is can I file for bankruptcy and would it erase this $25,000.00 debt from my records and if I filed would that stop Priority Collections from suspending my license? Any help would be greatly appreciated.

Sincerely,

Abie Aguiar


Asked on 1/19/11, 7:41 pm

2 Answers from Attorneys
Robert F. Cohen Law Office of Robert F. Cohen

You did the right thing by not taking a debt collector's legal advice, and seeking the information from someone licensed to practice law! Yes, you can file for bankruptcy protection (assuming you otherwise qualify) and yes, it should eliminate problems with the DMV.

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Answered on 1/24/11, 7:51 pm
Tony Carballo Carballo Law Offices

The claim against you would be discharged in bankruptcy and the lawsuit halted by filing for bankrutpcy under Chapter 7 if there is no other issue that could disqualify you such as having received a bankruptcy discharge already less than 8 years ago.. This answer assumes that you were not driving under the influence of alcohol or drugs at the time of the accident. Since you are unemployed it does not sound like there is much the insurance company can do to collect the debt from you and to have your license suspended Progressive needs to obtain a judgment. You can respond to the lawsuit (file an answer within 30 days of service) and delay having a judgment entered against you if you need more time or just file a Chapter 7 bankruptcy case right away if that is the advice given to you by a local bankruptcy attorney after an office consultation to discuss your entire financial situation.

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Answered on 1/24/11, 8:10 pm


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