The Citation to Discover Assets: When You Go To Court

The Citation to Discover Assets: When You Go To Court

Richard Fonfrias, J.D.
Chicago’s Financial Rescue & Bankruptcy Lawyer
Fonfrias Law Group, LLC


A Citation to Discover Assets is a special legal tool creditors use to force consumers to pay the amount of a judgment against them.

[Note: To use this tool, the creditor must first get a judgment again you. What’s more, you can stop the creditor from using this tool by filing for bankruptcy.]

After a creditor gets a judgment again you, the creditor asks the court to schedule a proceeding, called a “Citation To Discover Assets,” which you attend. At this hearing, the creditor asks you questions about your income and assets. This is how the creditor identifies your employer, salary and wages. In addition, the creditor learns the location of your bank accounts and whether you have other income or property.

Then the creditor could begin the process to garnish your wages or bank account. Or, he could ask the judge for a turn-over order, which requires you to give the creditor some of your non-exempt income or property. Or, the court may order that you turn over to the Sheriff non-exempt assets – other than cash or real estate – for public sale.Your creditor receives the sale proceeds to pay off the judgment against you.

4 Key Points to Remember About the “Citation To Discover Assets”

1. The court requires you to appear. If you don’t show up and answer questions, you could be arrested, fined, and sentenced to jail. If you go to jail, the court may require a large bond before authorizing your release. This money could be given to your creditor to apply to your debt, even if the bond money came from exempt assets.

2. You must tell the truth. You are under oath when responding to questions at this hearing. If you lie, you could be charged with perjury.

3. Your exempt assets are safe from seizure. The court’s turn-over order applies only to assets or income that are not legally protected. You should tell the judge which property is exempt so he or she doesn’t include it in the turn-over order. If you want certain property declared exempt, you must ask the judge to make it exempt. Then the court will determine the property’s status.

4. Don’t agree to a court-ordered payment plan unless you’re sure you can make all the payments. The creditor or his lawyer may try to get you to sign a court-ordered payment plan. This is different from a payment plan that you make only with the creditor. If the plan is court-ordered, you could be held in contempt of court and put in jail if you miss a payment. So don’t agree to a court-ordered payment plan unless you know you can make all the payments on time.

The Citation Examination

You will be sworn in by the Clerk and the creditor’s lawyer will conduct the examination. The lawyer will ask if you brought the documents he requested, such as the tax returns, bank records, and similar paperwork. If you did not bring those documents, the lawyer will usually conduct the exam anyway, but then continue the exam ordering that you must produce those documents within 7 or 14 days. And continue the citation hearing for 3-4 weeks.

Usually the creditor’s lawyer focuses his questions in three areas. (1) Are you employed? (2) Do you have bank accounts? (3) Do you own real estate?

(1) Employment: If you say you are employed, then the lawyer will issue a wage deduction against your employer. The lawyer can get 15% of your gross, pre-tax wages under Illinois law.
(2) Bank Account: If you have a bank account, then the lawyer locates the account and sends a third-party citation to the bank by certified mail. Then the bank must freeze your account until further order from the court. (If you think the lawyer might try to freeze your account, you’d do well to take your money out before the citation hearing.)
(3) Real Estate: If you own real estate, then the lawyer records a Memorandum of Judgment against your property. The Memorandum is signed by the judge who entered the underlying judgment. This Memorandum puts a lien on your real estate and interferes with your attempts to refinance or sell your property.

If you have equity in this real estate, the creditor’s lawyer can foreclose on the lien and force a sale of your property. So if you or your lawyer can negotiate some type of settlement, you’re far better off to do this.

As you can see, the purpose of a Citation to Discover Assets is so the creditor can find and seize your property. You’d do well to have an experienced finance lawyer at your side before and during a Citation hearing so you improve your outcome as much as possible. As always, you’re invited to call me.