If a creditor wins the case against you, 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 to now force you to pay the debt. The judgment does this by allowing creditors to attempt to take what you own (your assets). Assets include wages, bank accounts, homes, and other personal property.
Getting a judgment doesn't necessarily mean that the creditor is going to collect anything. Illinois has strict laws as to what a creditor can and cannot take. To determine if they can collect anything from you, the creditor must know what you own. They must complete a legal proceeding called a Citation to Discover Assets to find out.
What creditors can take
Once your creditor gets a judgment against you, they can try to collect from any assets you own that are not exempt. If you have bank accounts or stocks and bonds worth more than $2,000, they can take these funds up to the amount of the judgment. If you own a home, even if you have less than $15,000 worth of equity, they can put a lien on your real estate. A lien means that if you try to sell your house, you would have to pay off the debt to complete the sale. If you have a very large amount of equity in your home, your creditor might even attempt to foreclose its lien against your home. This means that they could force the sale of your house.
Usually, the creditor will ask for a wage deduction order. This directs your employer to send part of your wages directly to the creditor. The amount of deduction is 15% of your gross wages or the wages you earn over $371.25 per week. The lower amount of the two options will be used. If you make less than $371.25 per week, your creditor can't take any of your pay. The creditor does not have to notify you of the wage deduction order; it goes only to your employer.
What creditors can't take
There are certain protected things that a creditor cannot take, such as:
- Necessary clothing
- Income from:
- Take home pay up to $371.25 per week after all state and federal taxes have been taken out.
- $15,000 worth of equity in the home you live in (including a mobile home or condominium). Equity is the amount that something is worth in its current condition (what you could sell it for) minus what you owe on it. So if you own a $50,000 home with a $45,000 mortgage, you have only $5,000 worth of equity. Your creditor can't take it.
- A vehicle (car, truck, van, etc.) in which you have $2,400 worth of equity or less. If you own a car worth $10,000, but you owe $9,000 on it, you have less than $2,400 worth of equity, and your creditor cannot take it. You can also stack on the $4,000 other personal property exemption (see the last item in this list) to allow you to protect a motor vehicle in which your equity is as high as $6,400.
- Tools of your trade which are not worth more than $1,500 total.
- $4,000 worth of any other property. You have the right to choose the property. It could be a bank account, a tax refund, household furniture and furnishings jewelry, anything or any combination of things as long as the total value is not more than $4,000.
Make a wage assignment agreement with the creditor
File for bankruptcy
Before filing for bankruptcy, you should talk to a lawyer. You should only file for bankruptcy as a last resort. It may help immediately, but it has many long-term consequences.
You should always check first if you are a collection proof debtor. If you are, you may not have to declare bankruptcy.
Filing bankruptcy stops your creditors from taking any further action against you. This includes wage deductions, lawsuits, phone calls, and threatening letters. For more information about the bankruptcy process see Getting a PACER account for your bankruptcy case, Chapter 13 bankruptcy, or Chapter 7 bankruptcy.
Updated: January 2017