So you won your case, and the court or jury has awarded you the compensation that should, in full or in part, compensate you for your losses. But now you have a second hurdle: collecting on that judgment. Not every judgment creditor will just hand over what the court says that it owes, and not every judgment creditor can afford to pay whatever judgment has been entered against it.
To learn more, keep reading as our Chicago business litigation attorney at Ellis Legal clarifies your legal options.
Who is the Debtor, and What Kind of Debt is it?
In collecting your judgment, one thing to consider is whether the judgment is for a business/commercial debt or whether it is against a consumer for consumer debt, generally considered life, household, medical, or personal items or debts.
Often, the line isn't clear between personal or commercial debts, but it's an important distinction because the law provides consumers with personal or household debt more protections than it does business debtors. There are also laws that you, in collecting your judgment, can run afoul of and end up owing money for violating when collecting consumer or personal debts that don't apply to business debts.
Collecting When There's No Money or Assets
Many people or businesses say that they have no money or assets to pay a judgment, and you do have a right to do post-judgment discovery to see if that's true, identify the debtor's assets, and possibly collect on them.
If there are assets, you can have the sheriff collect those assets—but that's much more difficult with consumer debt, where consumers have protections and exemptions.
Even if the consumer or business legitimately has no money or property to pay the judgment, you have time, and should the Defendant's financial situation change in 1, 5, or even 10 years, you can still collect on the judgment. You can follow up with the debtor every few years to see if they are in a better financial situation as time goes on (although admittedly, this isn't ideal if you need the money from the judgment sooner rather than later).
Liening and Foreclosing on Property
In Illinois, you can lien people's property. This would allow you to be paid on the judgment of when and if the property ever sells. But again, this requires waiting until that actually happens.
You can foreclose on the property, but Illinois has a $15,000 exemption ($30,000 for married couples) if the property is homestead property. So, if the property doesn't have much equity, the time and effort of foreclosure may not yield much. If it does have equity, the threat of foreclosure is usually enough to bring people to the bargaining table to work out a solution to paying the judgment.
Garnishing Wages
You can garnish a judgment debtor's wages, but obviously, this isn't applicable when the debtor is a business. If the debtor is a consumer, you again may have to deal with certain exemptions; there is a formula to calculate the maximum amount that a creditor can take from a debtor's regular wages.
Don't get in trouble when collecting on your judgment–do it the right way. Speak with a Chicago business and legal ethics litigation attorney at Ellis Legal at (312) 967-7629 today for help.