Unsatisfied Judgment Fund
An unsatisfied judgment fund is a state-run pool of money used to compensate victims of motor vehicle accidents when the responsible driver cannot pay damages. It helps cover uncompensated bodily injury expenses—typically medical bills—when the at-fault party is insolvent, uninsured, or underinsured.
How it works
- The fund pays judgments up to statutory limits when a court has awarded damages but the responsible driver cannot satisfy the judgment.
- State governments typically finance these funds through small additions to vehicle registration fees or other surcharges.
- Each state sets its own eligibility rules, payout limits, and administrative procedures.
Eligibility and claims process
- The injured party must generally show:
- They were not at fault for the accident.
- A valid court judgment exists against the responsible party.
- Reasonable efforts to collect the judgment from the at-fault driver were unsuccessful.
- Requirements and filing steps (for the court and/or the state DMV) vary by state. Documentation commonly includes the court judgment, proof of attempts to collect, medical bills, and accident reports.
- If the fund pays the judgment, the state may pursue reimbursement from the at-fault driver.
Penalties and repayment for the at-fault driver
- Drivers with unsatisfied judgments can face administrative penalties such as suspension of driver’s license and vehicle registration until the debt is resolved.
- Resolution options vary:
- Pay the debt in full.
- Enter a court-approved payment plan (available in some states).
- Obtain a bankruptcy discharge of the debt (permitted in some states but not others).
- Once the judgment is repaid or legally discharged, the at-fault driver typically presents proof to the court and DMV to have privileges reinstated.
State variation and limits
- Rules, filing deadlines, payout caps, and reimbursement procedures differ widely between states.
- Some states treat fund payouts as subrogation claims, allowing the state to recover paid amounts from the at-fault driver later.
- Check your state’s DMV or motor vehicle law for precise requirements and limits.
Practical tips
- If you’re injured and believe the other driver cannot pay:
- Preserve all medical records, bills, police reports, and correspondence.
- Get a court judgment if liability and damages are disputed.
- Contact your state DMV or consult an attorney about filing for fund assistance.
- To reduce personal exposure:
- Maintain adequate automobile liability and collision insurance.
- Consider uninsured/underinsured motorist coverage.
Key takeaways
- An unsatisfied judgment fund protects not-at-fault motorists when an at-fault driver cannot pay a court-ordered judgment.
- Funds are state-administered, funded by fees, and pay up to statutory limits.
- Rules on eligibility, repayment, license suspension, and bankruptcy discharge differ by state—confirm local procedures with the DMV or a lawyer.