Citation to Discover Assets
This comprehensive guide will walk you through each step of tackling a Citation to Discover Assets, offering valuable information and insight to make your experience as painless as possible.
What is a Citation to Discover Assets?When you are sued for money and lose, the court enters a judgment ordering you to pay the money owed to the creditor. After, the creditor will call you to appear for a Citation to Discover Assets. During this proceeding, the creditor wants to know which part of your income and property he can take to pay the money you owe. The court requires that you bring to the hearing certain financial documents including tax returns, bank statements, and payroll stubs.
How to Prepare for a Return DateYour creditor will contact you with the date and time of a return date. At the designated time, you must appear in court and answer questions asked by your creditor's lawyer about your income and property. If you don't come to the hearing - or if you don't have the requested documents - the judge could have you arrested and charged with contempt of court.
The Citation to Discover Assets Creates an Automatic LienOnce a Citation to Discover Assets is issued, a lien is automatically placed on all of your nonexempt property. This means you cannot make or allow any transfers of your nonexempt property. If you do, you may be subject to court penalties for failing to obey the citation. In addition, your creditor may serve your bank with a Citation to Discover Assets, forcing the bank to freeze all accounts unless the funds are exempt. The bank must then appear in court. It is important for you to attend this hearing to assert your rights of exemption. The bank may not give money to your creditor without a court order. The creditor may also serve other third parties that have assets due to you. These include, for example, an insurance company that has not yet paid your claim or your employer who owes you wages.
Exemptions: Illinois Law Protects Some of Your Income and PropertyThe law specifies types of income and property that cannot be seized, which are called exemptions. Under Illinois law, you are allowed to keep:
1. $2400 of equity in a motor vehicle;
2. $1500 worth of equipment, machines, books and other items required in your work or profession;
3. Necessary clothing, a Bible, school books and family photos;
4. A general exemption of $4000, which you can use for any property you own;
5. The cash value of your life insurance policy provided that the policy's beneficiary is a spouse or another person dependent on you;
6. Social Security benefits, unemployment compensation, disability benefits, and veteran's benefits;
7. Support, maintenance or alimony, limited to the amount reasonably necessary to support you and anyone dependent on you;
8. Up to $15,000 resulting from a personal injury award;
9. Your interest in a qualified retirement plan, which is a retirement plan permitted by IRS, such as a 401(k), pension, or IRA;
10. $15,000 worth of equity in property you occupy ($30,000 for a married couple), called a homestead exemption. You cannot exempt investment property;
11. Up to $360.00 per week of your take-home pay (after taxes).
What Your Creditor GetsIf a creditor determines that all of your income and property is exempt under Illinois law, then the Citation to Discover Assets will be dismissed and the creditor will get nothing. Alternatively, if the creditor's examination is incomplete, the court sets a future date and may require you to return for more questioning. In the scenario where you have income or property that is not exempt, the creditor has three options:
A court-ordered payment plan in which you make regular payments to the creditor.
A wage garnishment, which forces your employer to withhold money from your paycheck to pay the debt.
Non-wage garnishment, which freezes your bank account and forces the bank to turn over your money to pay off the debt.
Paying the Amount You OweIf a creditor gets a judgment against you, there are many ways you can pay what you owe. The first option is to use a money order or certified check. (Do not pay in cash unless you get a signed receipt). The second option is to set up an installment payment plan. Put your suggested payment plan in writing and ask the judgment creditor to accept your plan. If the creditor agrees, this may save a lot of time and effort starting a garnishment proceeding or taking other action against you. If the creditor does not agree to your payment plan, then file a motion with the court asking the judge to approve your installment plan. If the judge approves, he or she may stop all other collection methods against you while you make the payments. You should know that a court-ordered payment plan must be paid off within three years.
When You Pay, Make Sure...After you deliver payment for a judgment, the creditor must sign a form called a Satisfaction and Release of Judgment. You must then file this form at the Court Clerk's office. This shows potential creditors that you paid in full. Also, keep a copy for your records. If the judgment creditor fails to sign the form * or refuses to do so * file a motion asking the judge to sign the release. The Court Clerk's office will tell you how to file the required papers and how to schedule the motion to be heard.