Being sued for car accident but can't pay

(California)

I am being sued for a car accident I had two years ago. I was insured, but for a small amount. The other party's car was totaled and their insurance company wants $35k to replace the car. My insurance company tried to hold the payment to my policy limit ($10k) but they refused and are coming after me for the total.

I have no assets, no home, no stocks, no cash in the bank, only a used car worth about $10k. To top it off, I have been unemployed for one year.

How do I proceed? I would prefer to settle out of court. I have good credit that I don't want to be ruined. Would they settle for less, and if so, would they be willing to put me on a long term payment plan? Is this something that is typical?

I could toss it into bankruptcy, but that is a last resort.

Reply from DebtCollectionAnswers.com:

It all depends on what the other party is willing to accept. Their attorney may be pushing them to try to get more, but if you don't have anything, you don't have anything.

Our suggestion is that you meet with a bankruptcy attorney to find out for sure that you are judgment proof - it sounds like you may be. If you are, see what the bankruptcy attorney advises. If you are able to demonstrate to the other party that suing you isn't going to get them anything more, they may decide not to pursue it. But you probably need something to back up your claim that you can't pay.