It’s challenging to get through car crash trauma. Wrecks can happen so quickly. One moment everything is fine, and the next you’re trying to put your life back together.
The accident might injure you, and it may total your car. You might have another driver screaming at you. It’s hard to think clearly at that moment.
Once the tow truck has come for your car, though, and you have a chance to think clearly, it’s time to look at some realities. This accident will impact your life, especially your finances.
Let’s look at some ways your monetary situation can change after a car wreck.
In This Post:
The Car Accident Settlement
You need to think about the car accident settlement first. A car accident settlement:
- Is what you owe to the other driver or injured party if you were at fault
- Is often arrived upon after an investigation, and a trial, in some cases
If you caused the crash, then you’ll have to pay the settlement. If it was the other driver’s fault, you will get money instead.
The way this impacts your finances all depends on who was at fault. You might find yourself significantly richer or poorer depending on the answer to that question.
The Court Might Garnish Your Wages
Let’s say that you were at fault for the accident. The reason for that might be because:
- You were drinking and driving
- You used illegal drugs before getting behind the wheel
- You were speeding
- You were tailgating
- Something distracted you, causing the crash
In any of those circumstances, the court will find in favor of the other driver. If that happens and you can’t pay restitution all at once, the court might elect to garnish your wages.
This will be a financial hardship for you since it means less money that you can spend on other things. You’ll have little choice but to live with it, though, unless you experience a sudden windfall and pay off the rest of what you owe all at once.
You Might Have to Buy a New Car
You might also have totaled your car in the crash. If that happens, then you may decide that you want to buy a new one.
If so, then that money will likely come out of your savings. If you don’t have the money to pay for the new car all at once, you may need to get an auto loan. You can apply to a bank or credit union to do that.
You May Decide to Buy a Used Car Instead
You might decide that you can’t afford a brand-new vehicle after a car accident. Maybe it’s too much of a financial hit for you at the moment.
You can go with a used or certified pre-owned vehicle instead. It’s still going to result in money coming out of your savings, but the blow won’t be as massive.
You Might Not Be Able to Do Things You Had Planned
If you need to pay a settlement after a car crash, or you need to buy or lease a new vehicle, or both, then you’ll have less savings. That might mean you can no longer take a vacation with the family that you had planned. You may have to take a more modest staycation instead.
You may have had plans to do work on your house, like adding a two-car garage, doing some electrical work, painting, or installing a new roof. Unless any of those are genuinely urgent, you’ll likely have to put that on the back burner for a time.
You Might Need to Sell Some Possessions
If you are in the wrong after a car accident, and there is a settlement looming over you, you may not have the money in your account to pay it all. We’ve talked about options like wage garnishment, but you also might consider selling some valuables, if you have any.
That might be jewelry, a big TV, clothing, or it could even be your house. None of that is ideal, but if you can’t garnish your wages, you’ll need to come up with some way to pay that money. If you don’t, then the bank could put a lien on your property, or you might even go bankrupt.
Some of these circumstances sound dire, and hopefully, you will be able to avoid them. Seek help from a car crash lawyer, and they can guide you, step-by-step, through the process of what comes next.