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Retrieving Debt from Third-Party Assets

Posted on in Debt Collection

Retrieving Debt from Third-Party AssetsWhen a court rules in favor of a creditor who has filed a lawsuit against a debtor, that creditor becomes a judgment creditor. This status gives a judgment creditor in Illinois several methods by which it can collect on the debt, such as filing a citation to discover the debtor’s assets and obtaining a judgment lien against a debtor’s property. It is wise to also look into any third-party assets that the debtor can claim, such as bank holdings and people who owe the debtor money. Third-party assets may help you in retrieving a debt if the debtor’s own assets are not enough.

Third-Party Discovery

If you believe that a third party may be holding some of your judgment debtor’s assets, you will need to file a citation for discovery with that party. The debtor must also be notified of the third-party citation. The third party is required to respond to your citation, even if they do not hold any of the debtor’s assets. If they fail to respond, you can receive a conditional judgment against the third party for what the judgment debtor owes.

When discovery confirms the debtor’s assets, the third party must freeze those assets until the court rules on whether they should be turned over. The debtor is allowed to use exemptions to protect third-party assets, including:

  • Any property valued up to $4,000 (through the one-time wild card exemption)
  • Social security benefits
  • Workers’ compensation benefits
  • Public assistance benefits
  • Unemployment benefits
  • Spousal maintenance

You can also file a third-party citation for discovery with the judgment debtor’s employer if you want to garnish the debtor’s wages. The citation will confirm that the employer pays the debtor and determine how much of the debtor’s pay is eligible for garnishment.

Third-Party Debtor

If another party appears to hold a debt to the judgment debtor, you may have the right to claim the payments made to the judgment debtor in order to satisfy your own repayment. You will need to file an action against the third-party debtor, which will freeze transfers made to the judgment debtor. The judgment debtor must provide proof of their debt agreement with the third-party debtor. You are allowed to claim as much money from the third-party debt agreement as is needed to fulfill your judgment, plus costs allowed by the court.

Contact a Chicago Debt Collection Attorney

Receiving a judgment against a debtor is a victory but not the end of your case. An Illinois debt collection lawyer at Dimand Walinski Law Offices, P.C., will continue working until you have collected on your judgment. Schedule a consultation by calling 312-704-0771.


Illinois Creditors Bar Association Chicago Bar Association Illinois State Bar Association
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