What Is an Unsatisfied Judgment Fund?
Let me explain what an unsatisfied judgment fund is. It's the money that some states set aside to handle uncompensated costs from bodily injuries in car accidents when the at-fault driver can't cover the damages. This fund steps in to help you, the injured and not-at-fault driver, pay for medical bills tied to the accident.
To qualify for help from this fund, you have to show you weren't at fault and that you can't get money from the responsible party. Typically, you'll need to file paperwork with the DMV to get an unsatisfied judgment against that driver. Keep in mind, the exact requirements for this paperwork differ by state.
Key Takeaways
- An unsatisfied judgment fund is the money set aside by certain states to cover uncompensated expenses from bodily injuries in motor vehicle accidents where the responsible driver can't pay.
- This fund protects drivers from financial losses in accidents they didn't cause.
- In most states with these funds, you can clear the debt by paying it fully or filing for bankruptcy.
Unsatisfied Judgment Funds Explained
The purpose of the unsatisfied judgment fund is to shield you from financial hits in car accidents where you're not at fault. The at-fault party might not pay because they're broke, underinsured, or uninsured. These state funds often get their money from a small fee added to auto registration. They cover unsatisfied judgments up to specific limits.
If you're the at-fault driver and can't pay, expect serious penalties. For instance, you could lose your driver's license until you cover the damages. Once you repay the fund, you might get your license back.
Penalties for Unsatisfied Judgments
Penalties for an unsatisfied judgment differ by state, but they often mean losing your license and vehicle registration rights until you pay the debt. In states with these funds, you can usually discharge the debt by paying it off or through bankruptcy.
In some states, bankruptcy wipes out the debt completely, while in others, you still owe it but might get a payment plan. Show the DMV that you've paid, discharged it, or are on a court-approved plan, and you can typically get your driving and registration privileges reinstated.
If you're the at-fault driver and you pay back the amount, the injured party has to file court paperwork confirming they've received the money. You can then take that to the DMV as proof to reinstate your license.
The costs of an unsatisfied judgment are high and can leave an uninsured or underinsured driver without driving rights for years if they can't pay or file bankruptcy. This is why most states require collision insurance, and I recommend ensuring you have enough coverage.
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