So, you have filed a lawsuit and you won. Now what? In this post, we provide a run-down of basic techniques for judgment collection in Illinois.
You have won your case and have obtained a judgment. How do you convert that judgment into money?
Early in my career, a seasoned attorney congratulated me after winning my first big case but cautioned that “Every schmuck in this courthouse has won a million dollar judgment. Next to none of them have collected it.” I was absolutely shocked at the time, but he was right–obtaining a judgment is less than half the battle.
Before you do anything, check to see if the person that owes you money has filed bankruptcy.
You know about the automatic stay in the federal bankruptcy law, right? The prohibition of the automatic stay is crystal clear: ” the commencement or continuation . . .of a judicial, administrative, or other action or proceeding against the debtor that was or could have been commenced before [the debtor filed bankruptcy] or to recover a claim against the debtor that arose before the commencement of the case under this title” is illegal.
Don’t mess around with the automatic stay because bankruptcy judges have no qualms about fining and sanctioning creditors that violate the stay. In most instances, when you have sued someone and they file bankruptcy, you will receive actual notice and an invitation to file a claim in the bankruptcy if the person you have sued has filed bankruptcy. If you have received this notice, file your Proof of Claim in the bankruptcy, and unless you believe that the debtor has defrauded you or committed some other bankruptcy offense, pray that you receive something in the bankruptcy.
If you have not received a Proof of Claim form, it is good practice to run a quick PACER search to see if the debtor has filed bankruptcy.
There are three main ways to collect a judgment in Illinois against individual debtors.
Section 2-1402 of the Code of Civil Procedure provides for three main judgment collection mechanisms:
- The “Citation to Discover Assets.” The Citation to Discover Assets is a legal proceeding by which you can compel the judgment debtor to come into court and testify under oath regarding his assets and liabilities. If there is property available to collect, you can ask the court for a turnover order or to conduct a judicial sale of the property.
- The “Non-Wage Garnishment.” The Non-Wage Garnishment is a useful tool if you know of a third-party that is holding the money or property of the debtor. Most commonly, it will be a bank or landlord that is holding cash for the debtor. Sometimes, however, you become aware that the debtor has transferred assets to a friend/relative/significant other to avoid collect. This tool is useful to compel the third-party to testify under oath regarding the property.
- The “Wage Garnishment.” Just about everyone is familiar with the concept of wage garnishment. A Wage Garnishment is a summons issued to the debtor’s employer commanding the employer to withhold a certain amount of wages and remit them to the court or the person who obtained the judgment.
There are other ways to collect judgments, and they are limited only by your creativity.
If the person has equity in their house, you can place a lien on their house and file a foreclosure suit. If the person owns a small-business, in some circumstances you can obtain a “Charging Order” against the small business that will entitle you to intercept any money that the debtor would try to pay himself from the business. You can go after the person’s state and local income tax returns.
The sky is essentially the limit for debt collection. If you know that the person has something of value, there is likely a way to convert that valuable property to money to satisfy your debt.