Blog

Call Us312-704-0771

Chicago debt collection attorneys
Subscribe to this list via RSS Blog posts tagged in judgment enforcement

Illinois debt collection attorney judgment enforcement

Whether you are from a bank, a credit union, an auto lender, an equipment lender, a truck lender, or another financial institution that might be involved in bankruptcies or other debt collection activities, you might find that sometimes you need more assistance with judgment enforcement. Simply having a judge declare that money or other assets are owed to you or whoever you represent might not be enough to repossess or recover the assets from the debtor. For instance, the debtor might be ignoring your phone calls and letters or the debtor might be hiding the assets you are trying to repossess. Whatever the case may be, using the full power of the law at your disposal is a good idea to recover what the courts determine is yours. That is when you should call upon a professional judgment enforcement attorney to learn what they can do for you. 

4 Ways a Judgment Enforcement Attorney Can Assist You

Among the many ways a judgment enforcement attorney can help you with your court-enforced debt collection case are:

...

What to Do If Your Debtor is Judgment ProofIn most cases, receiving a court judgment against a debtor gives a creditor a clear path towards debt collection. The judgment allows you to seize assets and garnish wages until you have collected what is owed to you. However, a court may still stop your collection efforts if it determines that the debtor is “judgment proof.” Also known as “collection proof,” a judgment-proof debtor is someone who lacks the minimum income or non-exempt assets to collect from. This person could be without a job or meaningful assets and surviving on public benefits. What can you do if a debtor is judgment proof?

Understanding What Judgment-Proof Means

Federal and state laws provide exemptions for debtors who are facing debt collection or have filed for bankruptcy. In Illinois, these exemptions include:

  • A homestead exemption for as much as $15,000 of equity in the home, or $30,000 if owned by a married couple
  • Wage protection if the debtor’s weekly income after taxes is less than 45 times the Illinois minimum wage
  • Protection for public assistance, retirement benefits, injury awards, and unemployment insurance
  • An exemption for one motor vehicle whose interest is not greater than $2,400
  • A $4,000 wild card exemption that can be used on its own or combined with other exemptions

A person is deemed to be judgment proof when they have no income or assets available after these exemptions.

...

Can You Retrieve Debt From a Retirement Plan?When you receive a court judgment against a debtor, you are looking for any of the debtor’s available money or assets that you can claim. Retirement accounts can be one of the most lucrative assets that a debtor owns if he or she has had time to contribute to it. However, many retirement accounts are protected from creditors, whether after a successful lawsuit or after the debtor has filed for Chapter 7 bankruptcy. Creditors need to understand what type of retirement account the debtor has to know whether they can try to collect from it.

Federal Laws

Both federal and state laws address which types of retirement accounts are exempt from creditors. Federal law protects debtor retirement plans if they are:

  • Qualified retirement plans created under the Employee Retirement Income Security Act; or
  • Social Security benefits.

Common ERISA plans include 401K plans, profit-sharing plans, and deferred compensation plans. An anti-alienation clause prevents creditors from collecting from qualified ERISA plans because the clause states that the participants in the plan cannot give away their benefits and outside parties cannot take them away. This prevents the plan administrator from releasing any funds to a creditor. However, creditors may be able to collect the benefits from an ERISA plan once they are distributed to the debtor.

...

Technicalities Do Not Quash Garnishment in Debt Collection CaseObtaining a judgment order against a debtor gives you the authority to enforce your debt collection. However, your debtor may continue to fight your collection efforts, based on legal technicalities and new claims. Thus, the legal battle against your debtor is not finished until you have received the money you are owed.

Recent Case

In MI Management v. Proteus Holdings, the plaintiff is a creditor who appealed multiple Illinois circuit court decisions that:

  • Quashed garnishment orders against a debtor;
  • Vacated a third-party citation to discover the debtor’s holdings in a bank; and
  • Granted a third-party creditor’s adverse claim to the debtor’s holdings.

In 2014, the plaintiff received a favorable judgment against two individual debtors and their company for breach of a $1.25 million promissory note. The plaintiff issued wage and non-wage garnishment summons against the debtors, who did not respond or appear in court. The court granted conditional garnishment judgment orders, which were later confirmed after the debtors continued to not respond. The plaintiff issued citations to discover assets to the debtors and their bank.

...

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:

...
Illinois Creditors Bar Association Chicago Bar Association Illinois State Bar Association
Back to Top