Author: Illinois Legal Aid Online; Chicago Bar Foundation
Last updated: July 2010
If the collection agency does not get you to pay, your creditor can either:
If your creditor sends your account to an attorney and a lawsuit is filed against you, you will be served with court papers called a "Summons" and "Complaint." If you are served with court papers you should contact an attorney immediately.
If your creditor wins the case, they will get a “judgment.” A judgment is a court order that says you owe your creditor a certain amount of money. The judgment allows your creditor, for the first time, to force you to pay the debt by allowing them to take what you own (your assets). Assets include such things as your paycheck, bank account, and property.
Just getting a judgment does not mean that the creditor is actually going to collect anything, however. Illinois has strict laws as to what assets a creditor can take. In order to find out if they can collect anything from you, your creditor must find out what you own. They do this through a legal proceeding called a "Citation to Discover Assets."
If you are served with citation papers, you must go to court to answer your creditor’s questions about what you own. If you do not show up for the citation hearing, a judge can send the sheriff to arrest you. Click here to learn more about a "Citation to Discover Assets".
Illinois law allows you to keep certain assets (property and income) no matter how much you owe. These assets are called exempt, meaning they cannot be taken by your creditors. If everything you own falls under these exemptions, then your creditor cannot take anything.
Your most important exemptions are:
For example, if you own a home, even if you have less than $15,000 worth of equity, a creditor can put a lien against your real estate. This means that if you try to sell your house you would have to pay off the debt in order to complete the sale. If you have a very large amount of equity in your home the creditor might even attempt to foreclose its lien against your home. This means that the creditor could force a sale of the house.
For example, if you own a car worth $10,000 but you owe $9,000 on it, you only have $1,000 worth of equity and a creditor cannot take it to satisfy another debt.
You can choose what property to include. For example, you could choose a bank account, furniture, equity in a car, jewelry, or any combination of those things as long as the total value is not more than $4,000. You also can combine this with other exemptions.
For example, if your car is worth $5,400, you could combine $3,000 from the wildcard exemption with the $2,400 car equity exemption and keep your car.
When a creditor gets a court judgment against you, the creditor can try to:
A creditor can garnish your wages in two ways:
A wage deduction order is an order from the court. The creditor can get this order only after they sue you and win the case.
The wage deduction order directs your employer to take part of your wages (15% after taxes) to pay the debt. When a wage deduction order is sent to your employer, the deductions will continue until the debt is fully paid off.
It is a Class A Misdemeanor for an employer to fire a debtor for ONE wage garnishment. (It is not against the law or an employer to fire for multiple wage garnishments.)
The creditor also has to send notice of this wage deduction to your last known address.
If your pay after taxes is less than 45 times the federal or state minimum wage, whichever is greater (currently $371.25) nothing can be taken from your wages for an ordinary debt. But some special rules apply to child support payments and tax levies by the IRS. For example, a child support garnishment will usually take at least 20% of net pay, and is given priority over other debts, so it must be paid first.
In Illinois, child support debt is collected through wage garnishment. Child support takes priority over all other debts you owe. This means that child support jumps to the front of the line of other people or companies trying to collect from you.
Additionally, the amount that can be garnished for child support is greater than the amount that can be garnished for a “regular,” non-child support debt like a medical bill. If a court has ordered a second garnishment for a regular debt, this creditor cannot get anything if 15% (or more) of your gross pay already is being garnished for child support. A child support garnishment usually will not leave enough of your paycheck for any other garnishments.
If your child support garnishment is already taking at least 15% out of your gross pay, but your employer takes money from your paycheck for the second garnishment anyway, you can ask for a court hearing in the “regular” collection case to straighten it out. You should talk to a lawyer if this happens.
A wage assignment usually is something you sign when you buy an expensive item on credit, like a car or furniture, or when you take out a loan. The wage assignment says that if you fail to pay the debt as you promised, you give the creditor permission to take either:
Your creditor does NOT have to go to court to garnish your wages if you have signed a wage assignment. They only need to send a “Notice of Intent to Assign Wages” to you and your employer to start the collection process. You usually receive the “Notice of Intent to Assign Wages” at your job. It says that the creditor will send the wage assignment to your employer within a number of days unless you bring all your payments up to date or you fill out the “Affidavit of Defense” which is attached to the Notice.
There is an easy way to stop a wage assignment. A wage assignment is “revocable at the will of the signer.” This means that even though you signed a wage assignment you can decide to end the creditors' right to use it at any time. The creditor will still have the right to sue you to collect the debt, but stopping the wage assignment can give you more time to come up with a solution to your overall debt problems.
To stop a wage assignment, you must send a letter to the creditor by certified mail and send a copy to your employer.
See sample letters to revoke your wage assignment.
Another way to collect on a judgment is to garnish or take money from your bank account. Once your bank has received notice from the creditor, your bank must freeze money in your account. If you make any deposits into your account after the freeze has started, the bank may freeze those deposits as well.
If a creditor freezes your bank account, they must mail you a notice of your rights to appear in court and contest the freeze. The notice must tell you the date, time and place the case is to be heard in court (called a return date). On the return date, a judge will decide whether
your bank should turn the money in your account over to the creditor.
If a creditor freezes your bank account, you should tell the bank and the creditor if any money in the account is exempt. You also need to go to court. Even if the bank agrees to remove the freeze on your account, you should go to court on the return date to make sure that the freeze is lifted and that the bank is ordered to return your money and pay any bank fees if the money was direct deposited exempt funds like social security, unemployment or child support. For more information, see: "Exemptions - What Creditors Can't Take" above.
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