What can we do if insurance carrier and is threatening to take us to court?

You owe the money and the insurer does have the right to sue to get it back. I am surprised though that they are not willing to make arrangements. I am not sure what suing you will do for them because it will not get them paid faster. If your husband personally incurred the debt and is personally sued for the debt in PA, then the personal exemptions would apply. Anything owned jointly as marital property could not be seized if only your husband is liable. This includes personal property as well as land. Your husband should get his name off of any joint bank account though and should not have a personal bank account. The LLC can have a bank account in the name of the LLC for business purposes. If you are not liable for the debts at all then you can a bank account just in your name. The purpose of an LLC is to provide personal protection for any debts incurred by the LLC. So your husband would not be personally liable for the LLC's debts. I don't see how the LLC can be sued here - the LLC did not incur the $16,000 debt. What assets does the LLC own, if any? Are these titled solely in the name of the LLC? I would start setting aside money which can be used to pay this down the road. I would tell the debt collection company they have 2 options: (1) you don't have $16,000 and they can set up a written payment agreement; or (2) they can waste more of their client's money and sue but its not going to get them paid faster. If they are still refuse, that is their problem. Let them turn this over to a lawyer and try your luck with them. If this does go to a lawyer, the lawyer may have a much different attitude and may be perfectly willing to take payments. Regardless, if you do work out an arrangement you need to get it in writing before you pay out a dime. If you get sued and the lawyer refuses to work out an agreement, you need to sit down specifically with a lawyer to know what assets are at risk. I know what you say in your post but people don't always include everything and an internet post is not a substitute for a consultation with a lawyer who can review the paperwork. Depending on what the lawyer says, you may have defenses to the litigation and if so, it may make sense to file an answer. If you have no defenses and still do not have the money it may make sense to file bankruptcy. The question is not whether your husband can be sued but whether the insurer is going to be able to collect on any judgment at the end of the day. If the answer is they can't, then keep saving funds until you have enough saved up to offer a reasonable settlement (about 50%). If the insurer refuses and still not let you make payments, you keep saving until you have 100% of whatever they are asking for and give them that. Understand though any judgments will interest at a rate of 6% per year (if your husband is sued in PA) and interest on judgments accrues daily so each day the judgment gets bigger by a few dollars. Some other questions - you are in PA - but this insurer is in NY. Does your husband do business in NY and can he be sued in NY? NY has wage garnishment whereas PA does not. I don't know how exactly this would work but if your husband is paid through the LLC and he is sued in NY then his employer (the LLC) might have to honor any wage garnishment. I have a PA client that works in NY and was sued in NY and would be at risk of wage garnishment so it does happen. Also, does your husband have any property at all in NY that would be at risk if he got sued in NY? Would owing money affect any other licenses your husband holds? Or his ability to get future work? If the answers to these questions are yes, it may make sense to get a loan if possible, pay the insurer and then re-pay the loan on your schedule.