Can an insurance company garnish my wages or tap into my Roth IRA? 7 Answers as of March 25, 2016

I have an SAIP insurance. I had no idea that this type of insurance only covers medical expenses, not property damage. I got into an accident which at the time I had this kind of car insurance, now I am about to be sued by the other person's insurance company. I have no way of paying the amount they said I owe.

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S. Joseph Schramm | Joseph Schramm
If the insurance company proceeds to court and obtains a judgment against you it might try to enforce the judgment by garnishing your Roth IRA or other banking or checking account you might have. Since this accident apparently arose out of an automobile accident in which you had inadequate insurance (not meeting the minimal coverage for PA) it might alternatively try to certify the judgment to the Department of Transportation, Bureau of Motor Vehicles to suspend your license. If they take this step you can try to petition the court to get your license restored so long as you pay a monthly installment on the outstanding judgment.
Answer Applies to: Pennsylvania
Replied: 3/25/2016
Candiano Law Office
Candiano Law Office | Charles J. Candiano
There is no such thing as SAIP Insurance in Illinois. Surely you have heard the phrase that ignorance of the law is no defense.
Answer Applies to: Illinois
Replied: 3/23/2016
Law Offices of George H. Shers | George H. Shers
The other person [or their insurance carrier filing for them] has to first get a judgment by filing a suit and then getting a court judgment. That can easily take more than 6 months. Then get then garish your wages but only above a certain amount. I do not know if they can go against the Roth IRA but I suspect they can not because it could sit in your account until you are passed age 65. You should have been told that that type of insurance only covers your own medical bills and not any damages you cause anyone. If you were not told that, you might have a cause of action against the insurance broker who sold you the policy.
Answer Applies to: California
Replied: 3/23/2016
Musilli Brennan Associates PLLC
Musilli Brennan Associates PLLC | John F Brennan
You should speak with a attorney immediately, generally they can garnish your wages if there is a judgment but your IRA is generally exempt from collection action. You may have to consider bankruptcy.
Answer Applies to: Michigan
Replied: 3/23/2016
Richard B. Jacobson & Associates, LLC | Richard B. Jacobson
If the insurance companhy wins a judgment against you, they could garnishee your wages. A Roth IRA is probably exempt from a garnishment. Your choices seem to be: (1) to defend the lawsuit and win; (2) to settle with the insurance company to pay an agreed amount monthly; or (3) to file a bankruptcy (so long as the accident did not involve drunken driving on your part).
Answer Applies to: Wisconsin
Replied: 3/23/2016
    Stephens Gourley & Bywater | David A. Stephens
    If the insurance company gets a judgment against you it can garnish your wages if you are making more than minimum wage. In Nevada it cannot garnish an IRA owned by you.
    Answer Applies to: Nevada
    Replied: 3/23/2016
    Law Offices of Ronald A. Steinberg & Associates | Ronald A. Steinberg, BA, MA, JD
    Read your policy carefully. If you have an indemnity policy, it will protect you from suit be a third party, up to the limits of the policy. If you are not sure, call the company. If you have an indemnity policy, you need to report the accident and the claim from the other party, and do it promptly. An insurance company can refuse to protect you if your inaction prejudiced their position. I firmly believe that you are better off reporting the claim to avoid that problem. I also recommend that you talk to a competent insurance salesperson, and get a decent policy of auto insurance. You want to protect yourself up to at least $300,000 if you get sued by someone else. You also want at least the same amount of coverage if the person who collides with you has no insurance, or a smaller policy than that. You want rental car coverage while your car is being repaired, and you want decent coverage for your medical bills, lost wages, etc. If you don't look out for yourself, no one else will.
    Answer Applies to: Michigan
    Replied: 3/23/2016
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