How To (Financially) Survive A Lawsuit

Here’s a sound you never want to hear…

Imagine you are sitting at home one quiet evening and you get a knock at your door. You open the door and there is a stranger staring back at you who asks, “Are you so-and-so?” After answering yes, they respond, “You have just been served.” You tremble as you take the package and then open it. It’s a letter from blah, blah, blah attorney at law and the first sentence grabs you: “So-and-so is suing you for an undetermined amount.” The rest of the words fade away.

An undetermined amount? Flashes of living under a bridge and eating out of a can flood your mind. How could this be happening to you?

Lawsuits are absolutely terrifying

If you haven’t protected yourself, not only can they be terrifying, but they can also ruin your life. Your house? Gone. Your investments? Gone. Your bank account? Gone.

You can get sued by anyone, for anything, at any time.

It’s sick, I know, but it’s true. Anyone can sue you for anything. This means what you’ve worked so hard to build can be wiped away with just one lawsuit.

Okay, so good luck with that. Oh, you want to know how to protect yourself? Of course you do! And the good news is that we’ve already talked about the solution. The very first layer of defense is to have an umbrella liability insurance policy. Remember that one, right? It’s the inexpensive insurance that sits on top of your auto and homeowner’s or renter’s insurance. If you get sued, this little policy can go a very long way to protecting your assets. And for most people, this is all they need.

Are there more sophisticated asset protection strategies?

In a word, abso-freakin-lutely. Lots of them. More than you would ever care to know, actually.

But for our purposes, just make sure you have that umbrella liability policy. Go get it!

The proceeding blog post is an excerpt from Get Money Smart: Simple Lessons to Kickstart Your Financial Confidence & Grow Your Wealth, available now on Amazon.