Law Office of Douglas R. Johnson, P.C.

Creditor's Rights

What are creditors' rights?

Answer: Creditor's rights are simply the right of an individual or an entity to collect on money that they are rightfully owed. Each state or jurisdiction has their own set of rules, but in Illinois, a creditor has the right to file a law suit and obtain a judgment against a debtor, put a lien on the debtor's property, file wage garnishments, file bank garnishments, and various other remedies to make the creditor whole again. In addition, the rights of a creditor may not only be enforced against a debtor, but also against different creditors with competing claims.

Do I need an attorney?

Answer: If you have a debt you are trying to collect on, finding a creditors rights attorney would be the best avenue to protect yourself from violating any collection laws as well as to achieve the optimal results in collection of the debt that is rightly owed to you, such as the Fair Debt Collection Act, which is described more fully below. In addition, it will be the most efficient way in obtaining a judgment order and being able to exercise any post-judgment remedies, such as a wage or bank garnishment.

How much does it cost?

Answer: Our firm is willing to work with each creditor to determine the appropriate amount of fees that should be charged. Our firm would consider a contingency fee basis if the case is fairly straight-forward and a likelihood of recovery on the debt.

What is the Illinois Fair Debt Collection Practices Act ("FDCPA")?

Answer: This act was created as a matter of public policy to protect consumers from debt collection abuse. The Illinois Fair Debt Collection Practices Act (225 ILCS 425/1) applies to any "consumer credit transaction." The FDCPA defines any consumer credit transaction as: "a transaction between a person and another person in which property, service or money is acquired on credit by that natural person from such other person primarily for personal, family or household purposes." 225 ILCS 425/1 ยง 2. This act applies to third-parties who are attempting to collect on a consumer debt on behalf of someone else, namely collection agencies. There are some entities that are excluded from the Act; it does not apply to persons whose collection activities are confined to and are directly related to the operation of a business, such as a bank, an abstract company, licensed attorneys, credit unions, etc. The FDCPA requires collection agencies to register as such and also has a list of requirements that they must follow to legally attempt to collect a debt on behalf of someone else. The FDCPA limits those who are attempting to collect a debt on behalf of someone else from engaging in conduct considered harassing to the debtor, from calling at certain times that are considered unreasonable, and from communication with various third-parties, i.e. at the debtor's place of employment, if the collection agency has reason to know that the employer prohibits the debtor from receiving such communication. This is a short summary of the Illinois Fair Debt Collection Act and there are many more facets to the act that should be discussed in detail with a creditors rights attorney before attempting to collect a debt on behalf of a third-party

Statutes of Limitation?

Answer: In Illinois, the statute of limitations for collection of a debt depends on the type of debt that is being collected. For example, the statute of limitations on debt collection based on a written contract (i.e. a promissory note, bills of exchange, written leases, etc.) is ten years from the date the cause of action accrued. However, if the debt collection is based upon an oral agreement, the statute of limitations is five years. If the debt is based upon a promissory note, or another negotiable instrument, the action must be commenced within ten years after the demand letter is sent to the debtor. Creditors can also sue consumers to collect on credit-card debt for five years.

Do I need a written contract to collect on a debt?

Answer: The answer is maybe. Oral contracts are legally enforceable in Illinois, so long as they do not violate the statute of frauds. Per Illinois law, there are certain types of contracts that must be in writing in order to be enforceable, such as contracts for the sale of land or those not capable of being performed within a year.

How is post-judgment interest calculated?

Answer: Per Illinois statute, if the judgment is based on a written contract, post-judgment interest is accrued at 9% per year, or the maximum amount that may be contracted under the law applicable thereto at the time the contract was made. The statutory post-judgment interest on money judgments is 5% per year.

How does a creditor enforce a judgment?

Answer: Once a creditor obtains a valid, enforceable judgment, they may enforce the judgments in a number of ways. Under Illinois law, post-judgment collection efforts are referred to as supplemental proceedings.

What is a wage garnishment?

Answer: If the debtor does not volunteer to pay off the debt or engage in any meaningful settlement discussions, the creditor can file a wage deduction action against the debtor. Under Illinois law, the amount of wages that are collectable is 15% of gross wages or the amount by which disposable earnings for a week exceed 45 times the greater of the federal and Illinois minimum wage. It is important to note that spousal and child support deduction orders have priority over all other wage deduction orders.

What is replevin?

Answer: Replevin is a means of collection that occurs prior to judgment. Similar to repossession, replevin occurs where the court orders that some property of a debtor be given to the creditor in partial or complete satisfaction of a debt. It differs from repossession in that the debtor has no pre-existing right to take control of the property. The court order gives him the power to do so. In some cases, a writ of replevin is chosen as the most efficient way to allow the creditor to extinguish the debt.

What is a citation/third-party citation to discover assets?

Answer: In many cases, a debtor will not respond to a court case pending against them on a debt all the way through the judgment phase of the process. Once judgment has been entered, a citation to discover assets may be issued against the defendant or against a third party, such as a bank at which they have an account. This citation freezes their non-exempt assets and requires a reporting as to which assets the party has and how they are kept. It allows the creditor a financial picture of the debtor so that post-judgment collection procedures may begin

What is a Turn Over Order?

Answer: A Turn Over Order is an order by a court that a debtor turn over certain property to a creditor after judgment. Generally, it is used to enforce a judgment already entered, but for which the debtor has not made any payment plan with the creditor. To obtain a Turn Over Order, a company may need to employ an attorney who specializes in post-judgment collections.

What is the difference between a debt collection agency and a law firm?

Answer: A debt collection agency merely sends communications asking a debtor to pay. If these efforts to persuade the debtor fail, the collection agency is basically worthless. In contrast, a law firm can initiate litigation itself. Only through litigation i.e. a court case can a creditor obtain a judgment which a is a enforceable legal obligation. A judgment allows creditors to pursue other remedies to get paid. At IllinoisAttorney.com, depending on our client's desires we may send a demand for payment or simply file suit.

What do I do if I have delinquent accounts receivables?

Answer: First, it's necessary to determine if the costs of collection are recoverable under the agreement that created the debt, and, if not, whether collection is worth the expense. Delinquent accounts receivable can be referred to either a collection agency or a law firm if your own in-house efforts have failed. An IllinoisAttorney.com we can help you determine if your account collection costs can be collected as well and give you the information you need to determine if collection is your best option.

What do I do if I have delinquent accounts receivables?

Answer: First, it's necessary to determine if the costs of collection are recoverable under the agreement that created the debt, and, if not, whether collection is worth the expense. Delinquent accounts receivable can be referred to either a collection agency or a law firm if your own in-house efforts have failed. An IllinoisAttorney.com we can help you determine if your account collection costs can be collected as well and give you the information you need to determine if collection is your best option.

What if the person who owes me money died?

Answer: Debts of a deceased debtor are paid out of the estate. Sometimes, however, those debts may be assigned to another person after the death of the debtor, such as the wife of the debtor or another joint owner of any property used to secure the debt. Debts of the estate are settled during the probate process. IllinoisAttorney.com can connect you with an attorney with the probate experience necessary to collect your debt from a deceased debtor if possible.

Commercial Litigation/Business Litigation

What is it?

Answer: Commercial litigation is a dispute between businesses or businesses and individuals with regard to commercial activity. The most common kinds of business litigation include contract disputes, employment disputes, and internal disputes, such as partnership or shareholder disputes.

Do I need a lawyer?

Answer: While many disputes can be resolved without the advice of an attorney, business disputes frequently involve complex legal issues, including piles of complex regulations and statutes. Tax issues and complex contractual duties may also muddy the waters. An attorney can help you determine, among other things, whether or not you need an attorney for the particular situation you are in. The responsive and experienced Illinois attorneys at IllinoisAttorney.com can help you figure out whether or not you need an attorney for your particular situation. Free initial consultations are available for most areas of law, so even if you find the landscape of your business dispute intimidating, we'll be happy to show you the way forward.

Should I file a lawsuit?

Answer: A lawsuit should be a last resort during a business dispute. When you get a court involved, things become more formal and much more expensive than other methods of dispute resolution. Sometimes, a lawsuit is a necessary step for a business dispute, but your best bet is to hire a lawyer trained in alternative dispute resolution rather than simply jumping into a lawsuit right away. A business attorney recommended by IllinoisAttorney.com can help you determine alternatives to a lawsuit. In addition, they can navigate the court system for you if a dispute must be brought to a lawsuit.

What do I do when I get served?

Answer: "Getting served" is a broad terminology that includes many types of legal documents which the court requires that you get. If you've been sued, it's important to talk to a local attorney as soon as possible to determine your best defense and to identify any counterclaims you may have against the party. Certain other legal documents can be answered without an attorney. For example, some kinds of citations or summonses only require information from you. An attorney from IllinoisAttorney.com can help you determine how much legal help you need. Contact an Illinois-licensed attorney with experience in business disputes to determine to do after you get served.

What Alternatives Dispute Resolution method should I use if I don't want to sue?

Answer: If you don't want to sue over a business dispute, alternative dispute resolution is your best route. Even if you want to leave the option to sue open, alternative dispute resolution may be a better place to start. The two most common kinds of dispute resolution are mediation and arbitration. Mediation is essentially a guided negotiation. A trained mediator will help you and the other parties to the dispute come to a mutually beneficial agreement by offering a neutral perspective. IllinoisAttorney.com can help you find a trained mediator and help you find a lawyer to decide how to prepare for the mediation. Arbitration is more formal than mediation. In Illinois, arbitration involves simplified rules of evidence and a trial-like process. An attorney can help guide you through the arbitration and represent your interests in the dispute, similarly to how they would at trial. Arbitrations are often binding on the parties, much like a trial, and it's important to understand your rights and your legal duties during an arbitration. An experienced attorney can help you through an arbitration. IllinoisAttorney.com can also help you find an experienced arbitrator to arbitrate your dispute.

What is discovery? - subpoenas, depositions, interrogatories,

Answer: Discovery is the formal process of trading information prior to a trial or other formal legal dispute. Discovery is governed by its own set of rules and laws. When you are served with a discovery citation or other discovery papers, you sometimes have very little time to respond. IllinoisAttorney.com can help you quickly find the right lawyer for the situation and help you determine which information you need to turn over. Sometimes, information is sensitive or secret. There may be protections available to prevent other parties from requiring you to turn over certain information. If you are required to turn over information during discovery, you may still be able to protect trade secrets from public disclosure through a court order.

What do I do if someone breaches a contract with me? - ie mitigation of damages?

Answer: The first thing to do when someone breaches a contract with you is determine the seriousness of the breach. It's possible that the right course of action for you or your business is to simply resume performance under the contract as soon as possible and waive your rights under the breach. If it's impossible or unreasonable to try to move forward with the contract after the breach, it's the responsibility of each party to mitigation or reduce and avoid as much expense as possible. For example, if someone breaks a lease with you, it's your responsibility to try to find a replacement tenant instead of leaving the leased property empty and collecting from your former tenant. The next step is to determine your remedies under the lease. In order to figure out how to remedy a breach of contract, the experienced business lawyers at IllinoisAttorney.com will be happy to help you navigate your options.

What do I do if a corporation is dissolved and breached a contract with me?

Answer: If the corporation was properly created and dissolved, it may be very difficult to get a judgment against it or against the people who were shareholders before dissolution. However, there are circumstances in which you may have a right to collect some of the asserts of the corporation or sue the officers and shareholders of the corporation directly. This can be a very complex process, and an experienced business litigation attorney will be necessary to help you determine how to sue a dissolved corporation for breach of contract.

What do I do if my business is owed money?

Answer: There are several steps to the collections process in Illinois. It may be as simple as making a phone call or sending a reminder invoice to the party who owes you money. Descriptions of other steps can be found in our FAQ section on Creditor's Rights.

What is a contingency fee?

Answer: A contingency fee is a fee you pay only if a certain thing happens, usually winning a court case. It is often measured as a percentage of the winnings. Contingency fees are one of the methods of payment a lawyer may accept. Contingency fees are commonly used in situations where a party might not have the means to pay a lawyer ahead of the judgment.

What is an alternative fee arrangement?

Answer: Any payment method for an attorney which is not an hourly billable rate is an alternative fee arrangements. Some common kinds of alternative fee arrangements include contingency fees and various forms of flat fees. For example, an attorney may charge a set amount for a certain kind of common case. Many of the attorneys at IllinoisAttorney.com offer alternative fee arrangements. If you can't pay for an attorney who bills strictly by the hour or need flexibility in payment structure to meet your business needs, let us help you find an attorney who fits your budget and payment method today.

Where will my lawsuit take place if I decide to sue?

Answer: The location of your suits can be determined by the location of the defendants, where the thing you are suing over took place, where the businesses involved are incorporated or do business, or where relevant property is located. Determining the proper place to sue can be a complex question - both legally and strategically. Whether you file in state court or federal court can be determined by the subject matter involved as well. An experienced trial attorney can help you determine the best place to file your suit. IllinoisAttorney.com would be happy to help you find an attorney to determine where to file suit.

How long does an average law suit last?

Answer: Depending on the type of suit, the complexity of the issues, and the attitudes of the parties and lawyers involved, a lawsuit can take anywhere from months to years. It's difficult to predict ahead of time how long a lawsuit will take. It's important to note, however, that the court can often grant some temporary relief up front before the suit has been completed. An experienced litigator familiar with Illinois courts can help you get the relief you need while your case is pending. IllinoisAttorney.com would be happy to help you determine if you have the time for a full lawsuit and help resolve your case as quickly and professionally as possible.

What happens if someone who owes me money goes BK?

Answer: Oftentimes, it is still possible to receive some or all of the money you are owed when a debtor goes bankrupt. If you have properly secured your debt or filed a proper judgment lien, you may be able to claim the first right to the sale proceeds of certain assets. Most of the work necessary to protect yourself from bankruptcy must be done ahead of time. Thus, it's important to consult a competent collections attorney before a debtor goes bankrupt. Whether you are looking to protect yourself from a future bankruptcy or an deal with an ongoing bankruptcy, the experienced collections and bankruptcy attorneys at IllinoisAttorney.com can help you find the right way to get as much of your credit repaid as possible.

Landlord Tenant FAQs:

What is the Chicago RLTO?

Answer:The "RLTO" is the Chicago Residential Landlord Tenant Act that is the governing statute for almost all rental properties within the City of Chicago.

Is it expensive to hire a Chicago Landlord Tenant Lawyer?

Answer:If you are a tenant and have a cause of action under the RLTO, many cases can be handled without paying a fee up front because the RLTO provides for the Landlord to pay your attorney fees, especially if they did not handle your security deposit the right way.

What is the law with respect to Chicago Security Deposits?

Answer:A Chicago Landlord must follow very specific laws in dealing with Security Deposit including paying interest, returning the deposit within a certain amount of time and only deducting certain things such as unpaid rent and repairs that are over and above wear and tear. Contact us to discuss further if you think your Landlord did not properly handle your security deposit

Enforcement of Judgment FAQ's

What is a citation to discover assets?

Answer:A citation to discover assets is a post-judgment collection tool utilized by a judgment creditor to discover what assets the judgment debtor has in order to satisfy a judgment.

What is a third-party citation?

Answer:A third-party citation is a post-judgment remedy issued by a creditor to a third-party who owes the judgment debtor money, such as a bank. You can step into the shoes of the judgment debtor and collect the money from the third-party if you have reason to believe the third-party is holding assets of the judgment debtor.

What is a wage garnishment?

Answer:A wage garnishment is a tool utilized by a judgment debtor to garnish the wages of a judgment debtor at their place of employment. A wage garnishment can only garnish a certain portion of the debtor's wages each pay period and must be served on the employer.

What is a replevin?

Answer:If someone has wrongfully taken or withheld property that belongs to you, you can file an Illinois lawsuit asking the court to have the property returned to you. You must be able to identify the property, where the property is, who has wrongfully taken it from you and explain why you are the rightful owner.

What is a detinue?

Answer:A detinue action is like a replevin action in that it is seeking to have property returned to its rightful owner. It is different because the person holding the property was legally entitled to it at one point but is now unlawfully retaining the property. For example, if someone stops paying on their car loan, they lender may seek to repossess the car through a detinue action.