Three Legal Mistakes That Could Cost You Your Home - or More
By: Jonathan Cooper
In the last few years, I have been approached on more than one occasion by individuals that had been sued, and were extremely concerned that their hard-earned assets could be exposed and subject to collection on a judgment. Unfortunately, I was compelled to tell some of these people that, in fact, their home and bank accounts were exposed.
And that's wasn't even the worst part; in nearly all of these cases, this terrible circumstance - where these people's hard-earned money was subject to being lost - was entirely preventable. In order to help assure that other hard-working people don't fall prey to this problem, I have compiled the following list of short-sighted acts that could land someone in the same unfortunate situation:
Mistake #1 - You Fail to Timely Notify Your Insurer That You Have Been Sued
Nearly all insurance policies require you to inform the company of a lawsuit, or even an anticipated claim, "as soon as practicable." The courts have generally interpreted this provision as requiring that the insurer be given written notice of the claim within 30 days; otherwise, the insurer may rightfully deny your claim. In order to best protect your interests, I suggest that you forward the insurer a copy of the suit papers both by fax (so you have a fax confirmation sheet) and by certified mail, return receipt requested to head off any claim by the insurer that they did not receive timely notice of the claim.
Mistake #2 - You Fail to Procure Enough Insurance to Protect Your Assets
For a difference of roughly $100-$200 a year, you can probably get an additional $200,000 worth of liability insurance; for roughly $300 a year, you can get a $1 million umbrella policy. Very often, people look to save a few dollars on their insurance, and purchase minimum policies that leave their assets, such as their home and bank accounts exposed. This is pure madness. Simply put, at these low prices, you cannot afford not to purchase this additional insurance.
Mistake #3 - "Since this Case is Frivolous, I Will Just Ignore it and it Will Go Away."
Ignoring the lawsuit will not make it go away - it will only make it far worse. You may not want to spend the money to hire a lawyer to defend your interests (again, this assumes that your insurer is not defending you), but if you don't, you will end up with a default judgment against you that prevents you from demonstrating that this claim is meritless. Further, you may end up with a judgment that clouds the title to your home, shows up on your credit reports, and the sheriff may levy on your bank accounts.
Don't be foolish; if you've been sued contact a lawyer that is experienced in the appropriate field - and do it immediately. In this manner, you will be going a long way to assuring that your assets are not needlessly placed at risk.
Copyright (c) 2008 Law Offices of Jonathan Cooper
Jonathan Cooper is an attorney in private practice. He represents small businesses and individuals in New York's trial and appellate courts. For more information on his firm, please visit http://www.jmcooperlaw.com
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