Can we lose our house and my husband's 401K due to our son's accident?
Question Details: Our son was in an accident, for which he was unfortunately at fault. Although the other driver appeared fine other than shook up, not just to us, but to the firemen and police at the scene her front airbag deployed and my son was T-boned and all side bags deployed but he had absolutely no injuries, we just received notice that they are requesting from our insurance the limit 100K with medical bills listed as over 92K and the notice states, "Health lien undetermined at this time", which our adjusted stated that could mean that they may sue for any overage. Since he was driving our car and is on our insurance, I am listed as the responsible party. We do not really have any assets other than our home which has 2 mortgages and an unsecured loan attached, our cars that have loans on them, and my husbands 401K. Can they take these if we are sued?
The 401k is exempt or protected from being garnished, so they can't take that. In theory, if you are sued for more than your insurance coverage and lose but cannot pay, they could look to put liens on your house or "execute on" the cars; however, the mortgages and the car financing take priority over (supercede) any later liens or other attempts to get payment out of the property, which means that unless there is substantial equity over and above the loan value, there is no point to them doing that--they won't get anything, since the mortgages or car loans have to be paid first before they could collect.