Weekly Tip July 17: Knowing How a Legal Situation Can Impact Your Finances?

You Will Need to Invest in a Good Lawyer

A good lawyer may be able to negotiate a settlement that limits your personal financial exposure. Professionals, like a Little Rock personal injury attorney, knows that finances can be impacted during a legal case. Having adequate protection you from false allegations or inaccurate witness testimony can help you feel better about the situation and give you greater peace of mind.
What If You’re Named in a Personal Injury Case?

If you are named in a personal injury case, you may be on the hook for thousands of dollars or more in damages. While your insurance policy may cover some or most of the amount, it may not cover everything. In some cases, you may be required to liquidate your home, car or other assets to cover the damages. Fortunately, you may be allowed to keep money in an IRA or 401k regardless of what happens to your other property.
You Could Have Your Wages Garnished

Assuming that you don’t have enough money or assets to pay your bills, you could have wages garnished to pay a judgment against you. This could make it difficult to pay bills or maintain a viable standard of living while you pay your creditors. If you can’t pay what you owe with wage garnishment alone, it may be possible to see your state or federal income tax refunds garnished or frozen as well.
Bankruptcy is an Option

If you can’t pay your bills and maintain a basic standard of living, it may be necessary to file for bankruptcy. Bankruptcy allows you to have debt discharged or reorganized to make it easier to get your financial obligations under control. However, it also lowers your credit score, which may make it harder to get loans or other forms of credit in the future.

If you find yourself in a legal situation, it could have numerous consequences or your finances. It is possible that you drain your savings, have to liquidate your property or even file for bankruptcy. Therefore, it is in your best interest to avoid illegal activity or buy insurance to protect yourself financially as best you can.