Your Citation to Discover Assets: When You Must Tell Your Creditor About All of Your Property

Your Creditor Discovers Your Property

If a creditor says that you owe it money, he may file a lawsuit to collect from you.  And if the creditor wins the case, the court awards them a judgment against you.  This judgment tells you how much money you owe to this creditor.

The “Citation to Discover Assets” is a court proceeding in which the creditor tries to collect money from you to pay the judgment.  The creditor’s lawyer asks questions to determine all of your sources of your income, and what property you have to pay off the creditor’s judgment.  The court may require that you bring tax returns, pay stubs, bank statements and other financial documents with you.

You’ll Know What’s Ahead When You Get it in Writing

The process begins when you receive in writing the notice of your rights and when your court case will be heard, which is the “return date.”  That’s when you must go to court and answer questions about your income and assets, which are posed by your creditor’s lawyer.  If you don’t come to court on the return date, or if you don’t provide the documents that your creditor requested, you could face arrest for contempt of court.

Your Creditor Can’t Take Everything

Certain types of your income and property are protected.  These are called “exemptions.”  Your creditor cannot take these assets.  They include…

• $371.25 per week of your after-tax take-home pay.
• Social Security and SSI
• Unemployment Compensation
• Public Assistance Compensation
• Veteran’s Benefits
• Child support and spousal support needed for you and your family
• Pension and most retirement benefits
• Disability, illness or unemployment benefits
• Award under a crime victim’s compensation law
• A wrongful death award needed for your support
• Life insurance needed for your support
• $2,400 equity in a motor vehicle
• $15,000 equity in your home ($30,000 for a married couple)
• $15,000 or less of a personal injury award

In addition, you have a “wild card exemption” of up to $4,000, which you can use to shelter any other property you own.  You must the court and the creditor when you are using your wild card exemption.

When You Get to Court…

If all of your property is exempt from your creditor’s claim, then the citation will be dismissed, leaving your creditor with nothing.  If the creditor doesn’t complete his examination, then the citation hearing may be continued and you may again be required to come to court and answer more questions.

If the creditor’s exam finds income or assets that are not exempt by law, the creditor may choose one or more of the options that follow:

• A court-ordered payment plan, which requires that you pay the creditor on a regular basis until you pay off your debt.
• A court-ordered wage garnishment that tells your employer to withhold money from your paycheck, which goes to pay off your debt.
• A court-ordered non-wage garnishment, which freezes your bank accounts and tells the bank to give the money in your accounts to the creditor to satisfy your debt.

Here’s What You’ll Do In Court.  You Must…

• Show up at the date, time and place called the “return date” in your paperwork.
• Find and Remember Your “Line Number”

Before you walk into the courtroom, you’ll see a list of all the cases scheduled for that day.  Find your case and you’ll see a number to the left of it, which is called the “line number”.  Don’t forget it.

Answer Questions from the Creditor’s Lawyer

The creditor’s lawyer will walk over and ask you questions about your assets and income.  This is called the “citation examination.”  The law requires that you take part in this process.  If any of your assets are protected by law, you must tell the creditor’s lawyer what exemption you claim.

Ask the Creditor’s Lawyer if You Are Free to Go

After you answer the creditor’s attorney you should ask the lawyer if you can leave or whether he will call your case before the bankruptcy judge.  If the attorney wants to call your case, then you must wait in court until the clerk calls your case.  This usually happens only if you have agreed to a payment schedule or if the creditor’s lawyer wants more information.

Call the CARPLS Legal Aid Hotline at 312-738-9200 or call me, Rich Fonfrias, at 312-969-0730.