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Using Citation to Discover Assets with Debtors

Posted on in Debt Collection

Using Citation to Discover Assets with DebtorsCreditors who take legal action against uncooperative debtors can view their debt retrieval as happening in two overarching stages. The first stage is receiving a court judgment that quantifies the monetary amount that the debtor owes the creditor. The second stage is retrieving the judgment debt from the debtor. Judgment enforcement of a debt can require further legal measures. Though the debtor is legally obligated to compensate the creditor, the debtor may claim financial hardship in order to delay or deny repayment. Creditors can use a citation to discover assets, which forces the debtor to disclose all of his or her available assets.

Citation of the Debtor

When a creditor files a citation to discover assets, the debtor is given notice of a court date that he or she must attend. At the hearing, the debtor is placed under oath and must answer questions about his or her available assets, including:

  • Income;
  • Financial accounts;
  • Real property; and
  • Valuables.

After the assets are disclosed, the court may allow the creditor to recover the debt by seizing the debtor's property and garnishing wages. However, Illinois law limits which debtor assets that creditors can take: 

  • Some assets are exempt from debt collection, such as disability benefits, social security and divorce payments;
  • A formula determines the maximum amount that can be garnished from wages; and
  • The debtor can claim an exemption on any property valued up to $4,000 and any vehicle with an equity interest that does not exceed $2,400.

Citation of Third Party

It may be necessary to file a citation to discover assets against a third party that holds the debtor’s assets – often a bank. The creditor must notify both the debtor and the third party of the citation being filed against the third party. Both must appear in court to answer questions about the debtor’s assets. As part of the citation, the creditor can order that the third party cease the transfer of any of the debtor’s assets that are not exempt from debt collection. At the hearing, the court may order that the third party turn over assets as part of the debt payment.

Judgment Enforcement

A citation to discover assets is a powerful means of determining whether a debtor has undisclosed assets that could be used to pay the judgment debt. The debtor may be held in contempt of court if he or she:

  • Does not attend the hearing;
  • Lies about his or her assets; or
  • Fails to follow the court’s repayment instructions.

A debtor may have several hidden assets that a creditor can claim. A Chicago creditors rights attorney at Walinski & Associates, P.C., knows the various debtor assets and how to retrieve them. To schedule an appointment, call 312-704-0771.

Source:

https://www.illinoislegalaid.org/legal-information/post-judgment-debt-collections-lawyer-manual

Illinois Creditors Bar Association Chicago Bar Association Illinois State Bar Association
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