Money & Debt

Creditors have several tools to collect money legally from people who don’t pay on time:

• The debtor (the person who owes the creditor money) may agree to a wage assignment,
• The creditor can go to court and ask to garnish the debtor’s wages or freeze the debtor’s bank accounts,
• The creditor can repossess physical items if the loan was for a specific purchase,
• The creditor can file a lien against the debtor’s real estate, and
• The creditor can go to court and ask to have the debtor’s personal property or real estate seized and sold to pay the debt.

Some people who owe money may be in a "collection-proof" status, which means they don’t have income or assets that private creditors can access. Learn more in Understanding collection-proof status basics. If you owe money, even after judgment has been entered, you can use our Debt collector letter Easy Form program to write a letter to send to your creditors.

Wage assignments

A debtor can agree to pay a creditor by paycheck deductions. This is called a wage assignment.

Wage assignments must follow the same rules for collection-proof income as other collection efforts.

A wage assignment differs from a court-ordered garnishment because the debtor can cancel the arrangement at any time. Debtors can use our Stop wage assignment Easy Form program to draft a notice to stop the assignment.

Illinois has strict rules for wage assignments. If a creditor doesn’t follow the law, the debtor may be able to sue them over the violations. Learn more in How a debt judgment can be collected common questions.

Collection lawsuits

When a creditor wins a lawsuit for consumer debt, a judgment is entered against the debtor. Most judgments accrue interest at 9% per year, and some include prejudgment interest. The court order will state what interest applies.

Consumer debt judgments have special rules. A “consumer debt” means a debt that was for personal, family, or household purposes. For consumer debt judgments before January 1, 2020, those debts accrue 9% interest. After January 1, 2020, the interest rate depends on how much the judgment is for:

• If the amount is $25,000 or less, interest will accrue at 5% per year.
• If the amount is more than $25,000, interest will accrue at 9% per year.

Citation to discover assets

After getting the judgment, a creditor can learn about the debtor’s financial resources by issuing a Citation to Discover Assets. Creditors can use our Citation to discover assets to debtor Easy Form and Collect a judgment from debtor’s bank or employer Easy Form programs to prepare these documents.

Then, the creditor can ask the court to:

• Garnish the debtor’s wages, and
• Freeze the debtor’s bank accounts.

A debtor who wants to explain that some assets are collection-proof must participate in the court case and provide documentation. Filing for bankruptcy can also stop all collection efforts immediately through an automatic stay, but has other consequences.

Responding to a citation to discover assets

A Citation to Discover Assets requires the debtor to provide documents such as tax returns, pay stubs, bank statements, and similar information.

Creditors can also issue citations to third parties, like banks, to get information about a debtor's accounts. The debtor doesn't have to do anything to respond to third-party citations and can't stop the release of information.

The Citation to Discover Assets process requires the debtor to appear in court and answer all questions truthfully. The creditor will also use the documents from the debtor and any third parties, like banks, to determine if assets can be seized to pay the judgment. While under oath, the debtor may have to respond to rigorous questioning about income, real estate, vehicles, and personal property.

Note: Failure to appear or comply with a judge's order to disclose information may result in a debtor being held in contempt of court, which can lead to fines or even a warrant for arrest. This type of arrest warrant isn't for failure to pay debt. It's for disregarding the judge's orders.

Wage garnishment

One of the primary ways a creditor can collect a judgment is through wage garnishment. A wage garnishment occurs when the court orders the debtor's employer to withhold a portion of their paycheck and send it directly to the creditor until the debt is paid off

When wages are garnished, the debtor receives a notice from the court. The employer must follow the court’s order even if the debtor disagrees with what the order says.

Debtors who want to challenge the garnishment because they have collection-proof income must quickly:

1. File a motion in court. If a debtor believes some or all wages are exempt, they must file a motion in court to explain why.
2. Request a hearing. After filing their motion, the debtor must request a hearing where the judge will decide if the funds are exempt from seizure.
3. Attend the hearing. The debtor must attend the hearing with all relevant documentation to prove the funds are protected.
4. Get a certified copy of the court order. If the judge rules for the debtor, the debtor should get a certified copy of the written court order to present to their employer.

Bank account garnishment

Bank account garnishment allows a creditor to freeze a debtor's bank account and seize the funds to pay off the judgment. After the creditor obtains a garnishment order from the court, they can serve it on the bank. The bank will then follow the court order and freeze the account.

Once an account is frozen, the creditor can take the amount owed. However, the debtor can ask the court to unfreeze the account and explain that certain funds are collection-proof. The debtor must quickly:

1. File a motion in court. If a debtor believes funds in the bank account are exempt, they must file a motion in court to explain why. Debtors can use our Emergency motion to claim exemption Easy Form program to create the motion.
2. Request a hearing. After filing the motion, the debtor must request a hearing. An emergency hearing may be possible if funds are urgently needed.
3. Attend the hearing. The debtor must attend the hearing with all relevant documentation to prove that the frozen funds are from protected sources or exempt from seizure.
4. Get a certified copy of the court order. If the judge rules for the debtor, the debtor should get a certified copy of the written court order to present to their bank along with a letter demanding the release of funds.

If the bank doesn't comply with the court order, the debtor can file a motion called a "Rule to Show Cause." This motion asks the judge to hold the bank in contempt because it didn't follow the court order. The bank can then respond and explain why it didn't follow the order, and the judge can decide what to do.

Seizure and sale of personal property and real estate

In some situations, creditors may seize personal property or real estate. This is called repossession if the creditor is seizing the property they loaned money to purchase.

Once a creditor obtains a judgment against a debtor, they can ask a court to seize the debtor's other property and sell it to pay the debt. Seizure of personal property typically involves cars, expensive furniture, or other items with substantial resale value. Creditors can also place liens on real estate and ask a court to require the property to be sold to satisfy the debt.

Learn more in How a debt judgment can be collected common questions.

Release and satisfaction of judgment

Once the creditor has successfully collected the full amount of the judgment, they are legally required to file a Release and Satisfaction of Judgment with the court. This document certifies that the debt has been paid in full and officially clears the judgment from public records.

This document is essential to prevent the former judgment from affecting the debtor. Even though consumer judgments are no longer listed on most credit reports, they may still appear in public records, and a release and satisfaction can help clear a former debtor's financial slate.

In cases where the creditor fails to file this document after the debt is paid off in full, the debtor has the right to request that the court issue the release as long as all obligations under the judgment are fully satisfied.