What should you do if you've received a citation to discover assets?
What should you do if you've received a citation to discover assets?
Bank levy, wage garnishments, other ways to collect debt
You should never ignore a citation to discover assets. Doing so could result in law enforcement forcibly taking you to court. If you receive a citation to discover assets, contact a lawyer for advice on how to proceed.
Recommended Read: “Legal defense for a citation to discover assets ~ How can an experienced collection defense attorney help you deal with a citation to discover assets?”
Here are the basics you’ll also need to know beforehand.
What is a citation to discover assets?
A citation to discover assets is a legal requirement where you come to court and answer questions about all of your assets, where you bank, and where you work. I have handled cases in which the creditor’s attorney asked to look through a debtor’s personal belongings (e.g. briefcase, wallet, pockets) for information regarding assets. Theoretically, if you have money in your wallet, a judge could order it to be turned over. In most cases, a citation to discover assets will require you to turn over your money and information about bank accounts and other property to the creditor.
Does the citation to discover assets create an automatic lien on property?
The automatic lien comes with the judgment, and the citation is just one of the methods for enforcing that lien or judgment. In other words, the citation itself does not create the automatic lien, but the judgment upon which it is based will already have done so.
Wage garnishments and liens happen before a lawsuit or after the suit?
After. If a creditor wins the lawsuit, the court enters a money judgment in its favor and against the debtor. That judgment gives it the right to seize your assets and is automatically a lien on any property you own. The tools for collecting are many, but usually creditors use a bank levy, a wage garnishment, a citation to discover assets, a lien foreclosure or a combination of all of the above. These tools are used in what are called supplementary proceedings. The good news is that there are defenses that an experienced, determined lawyer can raise on your behalf to save some or all your assets without declaring bankruptcy.
Recommended Read: “Filing for bankruptcy isn't always the best response to debt collection ~ What the TV ads don't tell you about US bankruptcy laws”
What are possible outcomes from a court date for a citation to discover assets?
If you do not show up to the court date for a citation to discover assets, then the judge will probably order a body attachment, which means you will be seized by the sheriff and forcibly brought to court at a future date. If you do show up, then you will be questioned about your assets.
If you are unable to raise exemptions or reasons why you shouldn’t have to pay, then the judge will order you to turn over your property to the creditor and will continue the citation for another hearing to see whether you actually turn over your property. But if you do have defenses, then the citation will be dismissed, which means that you will no longer have to come to court—at least until another citation gets issued.
It is important to remember that debt buyers play a very, very, long-term game. Even though the current citation to discover assets may end up being dismissed, the judgment against you will still exist until it is paid off. Judgments in Illinois may be enforced for up to 27 years. This means your creditor can wait for years, hoping that your circumstances will have changed to make you more “collectable”—and then hit you (or your bank or your employer) with another citation.
Are there certain assets that are protected from judgment collection in Illinois?
The following items are protected:
$1,500 worth of equipment for your business or profession are protected from liens
House exemption of up to $15,000 (This means that if you have $15,000 in equity on your house after the mortgage loan gets paid off, you will be able to keep it.)
Pension payments, retirement funds, and money for child support and alimony are also protected
Personal items (e.g. necessary clothing, a Bible, schoolbooks)
Social Security income, workers’ compensation
Vehicles for up to $2,400 worth of their value (This means that if your car is worth $10,000, they could seize and sell it for $10,000, and you would get $2,400 in return.)
Wildcard exemption of $4,000 that can be put toward any other exemption.
What happens if the creditor determines that all of your income and property is exempt under Illinois law?
If it’s determined that all of your income and property is exempt under Illinois law, then the creditor will dismiss the citation and wait until you have better days.