Legal Question in Personal Injury in California

Not only could you be responsible for some or all of the funds, but your license might be suspended as well. It's not a great position to be in because you were uninsured. If your financial situation is tenuous, you might consider filing for bankruptcy protection. If not, you might hire a personal injury attorney to negotiate a settlement. The other driver's insurance company must have paid for repair to the vehicle, and is now wants you to pay 'em back.

If you have questions about why your insurance was cancelled, an attorney should review your policy and payment records.

The insurance company for the other driver is blowing smoke. THEY are NOT the one who has the legal right to sue you, unless and until they have paid all damages flowing from the collision, including the property damage and the medical bills, AND have gotten an assignment of the cause of action of the other driver. There is some possibility that the DMV could take action against your license, since the law requires you to carry automobile liability insurance. While you may have an excuse that you were innocently unaware that yor policy had lapsed which they will accept in an administrative hearing, they will want to see that you have done something responsible, like going out and getting a policy of insurance immediately upon learning you have none. You may have to pay a premium to get it, but it will also insure that you keep your driving privilege. As far as a bankruptcy filing, I think that is very bad advice, since the right to file is a limited right granted only in Federal Court, and limited to one filing every 7 years, you should only do so if you are faced with debts that you cannot pay, even on time. Since the insurance company cannot possibly have spent $12,000 on a non injury accident, and is not likely to want to spend a lot of time chasing someone who may not have the assets to satisfy a judgment, as many people now are unable to do, I would wait until there is a lawsuit filed by the real party in interest -- the adverse driver -- and they get a judgment against you before taking the drastic step of filing a bankruptcy claim. The bankruptcy claim itself is likely to cost you more than the adverse party is willing to accept in compromise of the claim. It might be a good idea to consult an attorney if you think a lawsuit is going to be filed. If your financial circumstance is truly tenuous, you can always call legal aid societies for some free legal help.