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Automobile Accident Negotiations - Not That Easy

Automobile Accident Negotiations - Not That Easy

The L.A. Paradox

Do you want to know what makes Los Angeles the coolest city in North America?  Nothing is ever your fault.  Or anyone else’s fault, for that matter.  Did you drive drunk and go the wrong direction down a one way street, only to hit someone?  It’s their fault for not having seen you first and moving out of the way.  Did you crash into someone because you were you too busy texting your friend to pay attention to the road?  Oh well, it’s either your friend’s fault for texting you while you were driving or better yet, the other driver’s fault for assuming you were actually watching the road.

Yes, my post oozes for sarcasm, which definitely can go over a lot of people’s heads since here on the west coast we don’t speak “sarcasm”.  But yes, in our area of law, we’ve seen every excuse in the book from reckless and negligent drivers who injure our clients.  While I’ve grown used to the nonsensical excuses these offending drivers give for having almost killed some of our clients, what surprises me more these days is how their insurance adjusters try to justify their behaviors.

Recently we had a case where one of my clients was stopped on Ventura Blvd., as the car ahead of her was reversing to parallel park into a space at the side of the road.  She had been stopped for a good 10 seconds so there was nothing abrupt about the incident.  Another girl came along and rear-ended her at full speed, hard.  Her lack of attempt to even slow down illustrated she had not been paying any attention to the road.  The offending driver agreed it was her fault, and gave my client only her phone number.  My client was quite shaken up and in her haze did not force the issue of getting the insurance info on the spot, thinking the other girl would be true to her word of agreeing to exchange over the phone.  Bad choice.

As happens quite regularly here in Los Angeles, the offending driver goes home, probably smokes some (more) weed, and then decides to change their tune.  “Wasn’t my fault!”  In the above example, the offending party refused to answer her phone after the accident.  She ended up returning one text, but then wouldn’t give her information. While my client ended up sustaining injuries, after about a week it was clear the other girl was not going to cooperate. Fortunately, we helped our client contact the local police, filed a police report, and had the officer at the station contact the girl in question.  Funny how she was suddenly talking after the police contacted her!

You can guess what happened next.  Offending girl is now scared and finally ends up suddenly contacting my client via phone and text, complaining that she was going to call her back eventually and she was angry the police got involved.  We finally opened a claim with her insurance company and you can guess where this is headed – offending girl now tells her insurance company that our client reversed into her and that it is our client’s fault.  Welcome to LA where nothing is anyone’s fault!

Fortunately everything worked out fine and we were able to illustrate the facts about what a massive liar their insured was.  While the adjuster put up a short-lived fight about how it was possible our client reversed into theirs, it became clear that no one reverses at 30mph on Ventura Blvd, nor does someone go to the police in an attempt to track down the poor person they hit.

What’s the point of this post?  Simple things can become very complicated when you’re dealing with untruthful people.  Given that this is a big city, there is definitely a survival of the fittest, and often survival of the dumbest, factor in play here.  People will do and say anything to get out of assuming liability.  As such, it is important that you follow procedures when you’re involved in an accident.

Many at-fault parties will try to get you to bypass the system to avoid having their insurance premiums go up. An example of this is where you’re rear ended, and the other person doesn’t want you to go through insurance and report the accident.  Instead, the at-fault driver wants to pay you directly for your vehicle damage out of his own pocket to avoid the insurance process. In some cases, this can work if you know who you are dealing with.  More often than not however, this can be a bad idea.  Once the other driver realizes the actual cost of fixing your car, the additional cost of covering your rental car, and the fact that you may have medical bills, that agreement to “pay for everything” may suddenly evaporate.

Things to think about.  If you’re ever in an accident and unsure about what to do, always exchange insurance information on the spot and document everything you can, including taking pictures of the cars with your cell phone, including the other driver’s license plate.

Don’t hesitate to call us if you have any questions or desire a free consultation.  We are happy to help!  888.552.6272

WHY BANKRUPTCY CAN BE A BETTER OPTION THAN DEBT SETTLEMENT

I often have clients that come through our office asking about the option of debt settlement or debt consolidation to avoid filing a bankruptcy.  While the intent is noble, there can be many pitfalls that you are not aware of when trying to either negotiate down your debt, or alternatively, contract with a debt consolidation company to remedy your debt.

Let me cut right to the chase in discussing the potential problems with each of these "solutions".

Debt Settlement

This basically means that you are going to contact the creditor to whom you owe money, and try to pay them a lower amount than you actually owe.  ie. if you owe American Express $10,000, you will call them and try to see if they'll accept $5,000 to settle the entire amount.  In some cases, this is a great idea if you can come to terms, however there are a few things you may not realize before you jump into this.

1. When you settle a debt, the creditor usually wants a lump-sum payment immediately. Were you excited that you negotiated American Express down to only $5,000 and cut your debt in half?  Slow down cowboy.  This doesn't mean you can now make minimum card payments on $5,000 going forward.  American Express will want their money NOW.  All at once.  And if you're lucky, perhaps they'll let you pay in a few installments.  If you don't pay, deal is off.

2. Now that the economy is doing much better, creditors are not willing to negotiate their debts down as much as they did back in 2008 or 2009. There was a time not so long ago when you could sometimes get away with settling your debt for only 10 cents on the dollar.  Creditors were desperate to just get anything from you versus getting a big fat ZERO if you were to file bankruptcy.  With people back at work and people's property values no longer underwater, creditors will rarely cut you much of a deal.  My American Express example is hard to even find as these days they wouldn't take 50% of their debt.  Depending on your situation - maybe you could get them to reduce your debt by 10% or 20%.  Otherwise they are more than happy to sue you.

3. The credit can issue you a 1099 for the amount of debt they forgive. Therefore if you take a $10,000 credit card debt, and settle it for $4,000 - the credit card company may issue you a 1099 for $6,000 of imputed income. The problem with this?  Now you'll have a taxable obligation on the $6,000 and remember - (most) taxes are not dischargeable in a bankruptcy!  This is a larger problem for people who negotiate down larger amounts of debt since it can create a significant tax obligation to you that you would have never had had you filed a bankruptcy.

Debt Consolidation

There are two types of Debt Consolidation that we see.  The first one is where you take out one loan from one institution to pay off your debts.  This simplifies things because now you're just paying off one lender instead of 20 different credit cards.  A simple example would be taking a loan of $20,000 from Logix Credit Union to pay off your 10 credit cards totaling $20,000.  Now you simply make one payment every month to Logix to pay back the loan.  This is a good option in my opinion, if you can get a good interest rate.

The other type of Debt Consolidation occurs with rip-off artists aka Debt Consolidation Programs.  These companies claim that they will bundle up your debt and negotiate your debt down with the creditors.  In return, you pay the Debt Consolidation company one small monthly payment, and each month they in turn will distribute it to your creditors - kind of like how a Chapter 13 would work.  Here are the problems with them:

1. Most of these companies are complete scams. They will take your payments and hardly turn over any of the money to your real creditors. Next thing you know, you're embroiled in a fight with the same company that you thought would help you.

2. Creditors can still sell off or transfer your debt and pursue collection activity against you. Yes, that means they can still sue you even if you're in some sort of debt consolidation program with a third party.

3. Generally these consolidation companies give terrible advice. They will tell you to stop making all of your credit card payments for a few months.  You do realize once you do that it will hurt your credit even more.  Contrary to popular belief, filing a bankruptcy in many cases actually improves your score!

 

So there you go folks.  Of course, you should do everything you can do avoid a bankruptcy, but in my experience, actually filing a chapter 7 has been much better for my clients than these other avenues.  Over the last eight years many of my clients have met with me, tried all sorts of debt settlement and spent thousand of dollars, only to find themselves back at my office a year later, in the same predicament.

If you're thinking of filing bankruptcy or have any questions, don't hesitate to reach out and ask!  Call our main line at 818-293-5291 or send us an email at info@syndicatelegal.com

 

Thanks

Neil Bhartia