Creditor's Rights FAQs

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 lawsuit 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.

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.

In Illinois, the statute of limitations for the collection of 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.

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.

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 collectible 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.

In many cases, a debtor will not respond to a court case pending against them on debt all the way through the judgment phase of the process. Once a 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 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

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.

First, it's necessary to determine if the costs of collection are recoverable under the agreement that created the debt, and, if not, whether the collection is worth the expense. Delinquent accounts receivable can be referred to as 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 a collection is your best option.

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 of obtaining a judgment order and being able to exercise any post-judgment remedies, such as a wage or bank garnishment.

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 § 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

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.

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.

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.

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.

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.