Auto Insurance Claims: Can I be sued?, small claims court, blowing smoke

Question
Hi,
My husband was rear-ended in an accident. His insurance had lapsed. The
police report stated it was a no fault accident due to the fact the stories were
different. My husband had slowed down, with turn signal on to make a U turn
they were both in the left lane. The driver who hit him said he came from the
middle lane and cut in front of him.  The driver who hit him had insurance.
My husband was ticketed for having no insurance which has been corrected.
The other driver's insurance company is trying to collect 4,000.00 in damages
from us. We assumed as the accident was "no fault " (which we of course
disagree with) that each party would take care of their own vehicle.  We did
not respond to their demands and they have turned it over to a collection
agency.  The collection agency is now telling us that if we do not pay them
they will go after our assets and have my husband's drivers license revoked.
They also gave us a "deal"  to reduce the pay off to 2.000.00 that was valid
for 48 hours.  (We did not take it) Can they do this?  We live in Texas.  The
collection agency also stated that they were not necessarily planning on
taking this to court.
We do not deny that we are at fault for the lapsed insurance.
We have not filed a claim against the other driver who truly did rear end us
for that reason, we figured his insurance would cover his and we would just
have to fix ours out of our own pocket. As the police report did not define a
party to blame, where do we go from here?  We have no money (which is why
the insurance had lapsed.) Should we get a lawyer?

Answer
The collection agency for the other party (or there insurance company) cannot take any action against your assets, credit etc. unless they first secure a judgement from a court.  Right now, they are only blowing smoke.

As you have no insurance company to represent you, you'll have to represent yourselves in small claims court.  You can also file suit against the other party for your damages.  I cannot tell you if you need an attorney or not as I do not know enough about you or your situation.