Illinois Collection Laws

I live in Illinois. What are my rights in debt collection?

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Bill's Answer: Answered by Mark Cappel

A collection agent or law firm that owns a collection account is a creditor. A creditor has several legal means of collecting a debt. But before the creditor can start, the creditor must go to court to receive a judgment. See the resource Served Summons and Complaint to learn more about this process.

The court may decide to grant a judgment to the creditor. A judgment is a declaration by a court that the creditor has the legal right to demand a wage garnishment, a levy on the debtor's bank accounts, and a lien on the debtor's property. A creditor that is granted a judgment is called a "judgment-creditor." Which of these tools the creditor will use depends on the circumstances. We discuss each of these remedies below.

Illinois Compiled Statutes are available online.

Illinois Wage Garnishment

The most common method used by judgment-creditors to enforce judgments is wage garnishment, in which a judgment creditor contacts your employer and require the employer to deduct a certain portion of your wages each pay period and send the money to the creditor.

Wise Advice In most states, creditors may garnish between 10% and 25% of your wages, with the percentage allowed determined by state law. Garnishment of Social Security benefits or pensions for consumer debt is not allowed under federal law, but may be allowed for child support. See the Wage Garnishment article to learn more.

Illinois garnishment rules are complex, and are found in the Illinois Code of Civil Procedure, Article XII, Chapter 7: Garnishment and Part 8. Wage Deductions. The maximum wages, salary, commissions and bonuses subject to collection under a deduction order, for any work-week shall not exceed the lesser of (1) 15% of the gross amount paid for the week or (2) the amount by which disposable earnings exceed 45 times the federal minimum wage hourly wage or, under a wage deduction summons served on or after January 1, 2006, the minimum hourly wage prescribed by Sec. 4 of the Illinois Minimum Wage Law, whichever is greater, in effect at the time the amounts are payable (735 ILCS 5/12-803 and S. 1752, L. 2005).

In Illinois, Spouse A's earnings are free from the interference of Spouse B's creditors (750 ILCS 65/7). Child support garnishment limits are higher. Support of a spouse or dependent children have priority over all others (735 ILCS 5/12-808(c) and S. 1752, L. 2005).

In Illinois, 401(K) or other retirement funds are exempt from garnishment (735 ILCS 5/12-704 and 5/12-804).

Illinois Levy

A levy means that the creditor has the right to take whatever money in a debtor's account and apply the funds to the balance of the judgment. Again, the procedure for levying bank accounts, as well as what amount, if any, a debtor can claim as exempt from the levy, is governed by state law. Many states exempt certain amounts and certain types of funds from bank levies, so a debtor should review his or her state's laws to find if a bank account can be levied. In some states levy is called attachment or account garnishment. The names may vary but the concepts are the same.

In Illinois, a levy is called non-wage garnishment, and is allowed under 735 ILCS 5/12-701 et seq. Non-wage garnishment is allowed if the plaintiff possesses a legal instrument such as a notice commanding the financial institution of a claim against the account. Illinois 735 ILCS, 5/12-1001(b) exempts debtor's interest in $4,000 worth of personal property, including cash.

If you reside in another state, see the Account Levy resource to learn more about the general rules for this remedy.

Illinois Lien

A lien is an encumbrance — a claim — on a property. For example, if the debtor owns a home, a creditor with a judgment has the right to place a lien on the home, meaning that if the debtor sells or refinance the home, the debtor will be required to pay the judgment out of the proceeds of the sale or refinance. If the amount of the judgment is more than the amount of equity in your home, then the lien may prevent the debtor from selling or refinancing until the debtor can pay off the judgment.

Under Illinois law, an outstanding judgment can become a lien on real estate in Illinois owned by the judgment debtor. A judgment lien gives the judgment-creditor the right, under certain circumstances, to have the property sold in order to satisfy the judgment (735 ILCS 5/12-101 et seq). The Illinois homestead exemption makes it difficult to sell the residence of the judgment debtor, however (735 ILCS 5/12-901 et seq).

If you reside in another state, see the Liens & How to Resolve Them article to learn more.

Illinois Statutes of Limitations

Under Illinois law, the statute of limitations is governed by Article XIII 735 ILCS 5/ Limitations on an open account (i.e., credit card) is 5 years, and written contracts have a 10-year statute of limitations.

Wise Advice Collection agents violate the FDCPA if they file a debt collection lawsuit against a consumer after the statute of limitation expired (Kimber v. Federal Financial Corp. 668 F.Supp. 1480 (1987) and Basile v. Blatt, Hasenmiller, Liebsker & Moore LLC, 632 F. Supp. 2d 842, 845 (2009)). Unscrupulous collection agents sue in hopes the consumer will not know this rule.

Illinois Foreclosure

Illinois foreclosure laws are found in 735 ILCS 5/Art XV. Review Illinois laws to learn more about the rules surrounding foreclosure in this state, including deficiency balances. Illinois has no anti-deficiency rule. See also the resource Mortgage Foreclosure Illinois to learn more about Illinois foreclosures.

Illinois Payday Loan Collection

See the resource Illinois Payday Loan to learn how Illinois law protects Illinois payday loan borrowers.

Illinois Collection Agency Act

Debt collectors must obtain a license in Illinois. The Illinois Collection Agency Act (ICAA) mirrors the federal Fair Debt Collection Practices Act, but unlike other states, does not include original creditors. Violation of ICAA is not a criminal offense. If you have been victimized by a collection agency, file complaints with the:

  • Illinois Department of Financial and Professional Regulation
  • Illinois Attorney General
  • Federal Trade Commission

Consult with a lawyer to discuss filing an ICAA-based civil lawsuit against the collection agent. Some lawyers take these cases on a contingency basis, which means no out-of-pocket costs to you. ICAA's limits and prohibitions can be found in Illinois Chapter 225, Act 425.


Consult with a Illinois attorney experienced in civil litigation to get precise answers to your questions about liens, levies, and garnishment in Illinois.

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Comments (105)

Chas C.
Wheaton, IL  |  April 21, 2014
I had recently been getting letters that I owed about $700 for some past medical bills, whatever was not paid by the insurance company. I reside in Kane County in Illinois. I've seen where some people recommend never speaking with a creditor over the phone and only do it via mail. Is there a procedure you recommend for doing this? Do you recommend ignoring all the calls and just doing mail? Is it ok to talk to them by phone first and ask them to send you additional information in writing? Thanks!
April 21, 2014
We recommend your first step is to validate the debt. The next time the collection agent calls, or if you receive a written collection letter, gather all of the contact information about the collection agent as possible and send it a debt validation notice. We include a great deal of information on the page I just mentioned, so take your time when you read it so you understand the debt validation process and what it means when a collection agent fails to validate a debt.

Negotiate a settlement to the debt only if a collection agent validates the debt properly. If you reach that point, then you can decide to handle these negotiations in writing or on the telephone.
Matt C.
Peoria, IL  |  July 27, 2013
My brother recently had a judgment against me after an unpaid car loan. My parents recently died, and the bank took a lien on their house for future property he would gain. The problem is, the house is worth about 80K, while 70k is still owed on the house. After selling the house and paying off the mortgage, the profit will be split between the 4 of us. Does the bank have the legal authority to place a lien against his parents estate? Since it is not his "personal estate," was it legal for them to place a lien against the home when not controlled or owned by him?
July 29, 2013
Your question concerns the intersection of two branches of law called remedies and probate. No two states have identical remedies laws and probate laws, so it is difficult to make even a general observation about how courts would resolve a situation like yours. Accordingly, the best person to answer your question is a lawyer in the state where your parent's property is located. Specifically, look for a probate lawyer in that state who has litigation experience. Most estates are probated without any controversy. You need a lawyer who's experienced in arguing a case before a judge.
Judy R.
Whittier, CA  |  October 29, 2012
Our corp. bank account was "raided" by the bank because of a balance due on an old corp. credit card from 4 1/2 years ago. The credit card office is in Illinois - our corporation is in California. Does the bank have the right to raid a bank account to satisfy a credit card debt of over 4 years old? This raid was done without notice or correspondence from the bank. We just woke up one morning last week, check our account, and all of our money was gone. We had a -0- balance! Don't we have any rights left when dealing with big banks? JR
October 29, 2012
Take all of the information you have to a lawyer in your state who has consumer law experience. He or she will ask you the following questions to learn more facts about the event you described:
  • Did the credit card issuer or its collection agent have a judgment against your business?
  • Was this event an account levy?
  • Is the credit card issuer in the same corporate family as your bank? (I am wondering if there is a right of offset issue here.)
  • Is the bank nationally chartered?
  • How is your business organized? (sole proprietorship, partnership, corporation)
  • Who signed the credit card agreement for the card in question?
  • Did the signer of the credit card do so as a corporate officer (assuming your company was a corporation), or sign it in a manner to give him or herself personal liability for the debt?

With these questions answered, the lawyer will determine if the bank's seizing of the funds was in accordance with state and federal laws and the contract you signed when you opened the account. To the point, your lawyer will advise you if you can unwind the account levy, offset, or freeze.

Jay W.
Mount Vernon, IL  |  August 26, 2012
I live in Illinois. I owe the State of California approx. $3000 in back taxes from when I lived there in 2008. They have levied my checking account and taken $325, which was all the money in the account. I have a US Bank checking account that was opened in California but never changed when I moved to Illinois because there is US Bank less than a mile away. Are my collection rights governed by Illinois or California? I assume the judgment was entered in a California court, but I haven't been served a Notice of Levy yet as this just happened today (I don't think a State agency has to send a summons or Notice to Appear). I'm pretty sure that Illinois law allows $2000 of a bank account or $4000 "wild card" to be exempted from judgment or attachment, but California law doesn't allow any of a bank account to be exempt. I couldn't find anything in 735 ILCS that exempts tax debt from being exempted (sorry that's so poorly-worded)
August 28, 2012
The CA FTB has administrative powers which allow them to issue a Writ of Garnishment. Therefore they do not need a court judgment. They can cross state lines and garnish bank accounts in places other than California. If you feel that the debt is not legitimate then you can file an appeal with the CA FTB.

Although Illinois law has collection exemptions for court judgments, tax levies are different. If you need legal advice, I recommend you speak to a lawyer.
B. J.
Bloomington, IL  |  July 12, 2012
i am being summoned for an old credit card, but the law firm that bought the old debt does not know where i work. i called and tried to settle but couldnt come to an agreement, but they kept trying to get me to give out my checking account and also asked where i worked which i told them neither. can they garnish my wages if they cant find who my employer is?
July 13, 2012
You are not obligated to share any personal information with a collection agent or its lawyer, including your bank account number or your employer's name. However, if a court orders you to disclose personal information, then you must do so.

You mentioned a summons. Consult with a lawyer in your state who has consumer law or civil litigation experience to learn how to answer a summons and complaint effectively.
Dee B.
Wood Dale, IL  |  April 20, 2012
Back in Sept 2011 a court ordered wage garishment was granted against me by the courts. Since Oct 2011 the garnishment has been coming out of my pay check. Today mine and my new wifes' bank accounts have been frozen for discovery of assets by the same company/attonry and case number. How is this posible when the courts have already be granted the wage granishment on this case? Not to mention the fact that all the monies that are in the accounts are not soly from be and there are not assets money goes in and money goes out for cost of living - rent payments, car payments, insurance food and monies that my wife pays to her ex for their childrens expences.
April 25, 2012
I do not have good news to report to you. Wage garnishment, account levy, and liens are not either/or remedies available to judgment-creditors. An aggressive judgment-creditor can use all three remedies to recover funds awarded in a judgment. My advice? Consult with a lawyer in your state immediately about filing for a waiver on the account freeze.

I realize what I am about to write does not help you in your situation, but it may help someone who is about to face your situation. Avoid joint accounts for the reason Dee explains vividly in her comment above. Instead, spouses should open separate (not joint!) accounts at the same bank or credit union. When you need to move money from one account to the other, use the bank or credit union's online balance transfer option to move funds as needed.
D B.
Wood Dale, IL  |  April 26, 2012
Hello Bill and thank you for responding. I wanted to let you know and those out there in Illinois that may be facing this very same issue...this was the action that we took on our own to remedy this unforcen situation. We went to down to the court house the next morning as soon as they were open and filled for an Emergency Motion so that we could be heard by a judge that next day to have the freeze removed from accounts. We had some forms had to be completed. This was a little intimidating as we had no idea what we were doing but the clerk was very helpful with assisting us in completing the forms and the good news was that there was no cost to us to have this motion filed. Once we completed the forms the clerk logged them and then instructed us to walk a copy of the papers over to the attorney that put this into motion. Basically we served them with the papers advising them of the court date. We appeared in court the next morning at 8:45 for a 9:30 am court call as we were advised to by the clerk so that we were one of the first to check in with the court room clerk. We spoke briefly with and advocacy group and we were told that we should ask for a “wild card exemption" because we had less than $4000.00 in our joint accounts and the monies/propertied be returned to us within 24 hours. My wife was instructed to inform the judge for all her wages to be returned to her as she was never part of the original case only if she was asked by the judge why she was present. The motion was granted and all we had to do was wait for the judge to sign the order and bring it to our bank. We did get a great piece of advice from the advocacy law firm which was, do not change your back accounts! By leaving the accounts alone, they, meaning the same case/plaintiff cannot do this again and if they do, they will be sanctioned and fined by the courts. If you open new accounts they can go after those new accounts. To those out there that may be facing the same set of circumstances we truly hope that this helps.
April 26, 2012
Excellent news, and thank you for explaining the process you followed.
William B.
Elmhurst, IL  |  July 25, 2012
The joint bank account I hold with my wife was frozen last week due to a judgement from a credit card issuer. The original judgment was that they would automatically deduct $50 from my checking account every month. Apparently I wasn't aware they had sent me a renew for this deduction several months ago. I was under the assumption this deduction would take place automatically from my bank account until the debt was paid. The attorneys froze my bank account I hold with my wife. My bank account had $2,600 dollars in it, which consisted of my wife's wages and one of my wages that had already been garnished.I also would like to mention I also have a wage garnishment from another credit card collection agency.

My question is are my wife's wages exempt from garnishment if she was not part of the original case, and if so how do I present that to the judge? Also what about the wages that have already been garnished. Can I claim a wild-card exemption?

I don't know if it matters but we have 4 boys, 1 that is 18 and 3 still in grade school. I was at the courthouse today to get an emergency motion to release my bank account but they gave me forms that are very overwhelming and told me that it would cost us $175 to file. I appreciate any insight into my predicament. Please let me know my options if any.

The previous replier DB is in my area ,so I was surprised that there was a fee to file this motion at the DuPage County courthouse in Wheaton. They also told me that it would take a week.
July 25, 2012
You mentioned an Illinois county, so I will assume you reside in Illinois. As far as family law is concerned, Illinois is a common law state, and not a community property state. Therefore, a judgment against one Illinois spouse has no legal effect on the other spouse. Here, your spouse's wages are not subject to garnishment due to a judgment filed against you.

The judgment-creditor has the right to levy (sometimes called an account garnishment) an account owned by the judgment debtor. This includes joint accounts. That is why I recommend spouses never share accounts, but instead open separate accounts at the same bank or credit union.

You asked about a wild-card exemption and an emergency release from the account seizure. Consult with a lawyer in your state about these matters. I realize you do not have the funds to pay for much right now. Call the DuPage County Bar Association and ask for the names of the organizations that provide no-cost legal services to people with low or no income in your area. Make an appointment with one of the organizations, and bring all of the documents and letters you have regarding the debt to your meeting. The lawyer you meet will advise you accordingly.
Steve W.
Des Moines, IA  |  April 17, 2012
What are the proper steps in Illinois regarding collecting judgment against a successor in a contracts case? If a judgment has been issued against a previous owner, how can I collect that judgment from the business' successor (successor purchased the business and expressly agreed to assume all liabilities, debts, etc.) Should I proceed with collection actions, should I litigate? What are the proper steps?
April 17, 2012
I assume you are the judgment-creditor. Consult with a lawyer in your state who has civil litigation experience. The laws of remedies are precise, and it is easy to miss a step in the collections process and scuttle all of the work that went into obtaining the judgment.
Steve D.
Camillus, NY  |  April 10, 2012
I incurred $250k in legal fees (10x more than estimated) in Illinois and paid $125k. The balance has been unpaid for 3+ years but I still receive monthly invoices. I offered to review a payment plan 3+ years ago but none was sent.
  1. Do I still owe this?
  2. Will it expire?
  3. How should it be settled?
April 10, 2012
  1. Yes. In most states, a debt is owed even after the state statute of limitations has run its course.
  2. If you are an Illinois resident, no.
  3. You can negotiate a settlement, ignore the debt and hope the creditor gives up, or file for bankruptcy to discharge the debt if it qualifies for discharge.

You may not wish to read these words, but an Illinois lawyer can explain your rights and liabilities in detail.

James F.
Beecher City, IL  |  April 10, 2012
I own a small business in central Illinois. We had an issue with a shipping company that we were using last year and are still fighting about the amount owed for shipping services (so I thought). Long story short, we were contacted today by a private investigator. He said that he'd be coming out tomorrow to go over our bank records, obtain a list of our vendors, etc...when pressed, he stated that he worked for Ken Gxxxxxx and couldn't answer more questions. He came up with a "docket number", which he provided along with Ken Gxxxxxx's phone number. I called the number, of course, and Ken Gxxxxxx says he's a lawyer and that they are investigating us for various things, most of which was operating a business under false pretenses or something to that effect. This all finally got back to the shipping company and that's apparently who has hired him, although they really haven't even contacted me in the past couple of months regarding this. I assume that most of this is harassment and little more. I'm not stupid, so I told Mr. Gxxxxxx that under no circumstances would we provide so much as a cup of water for his private investigator and that if he stated his intents, it really defeats the meaning of the word, "private". I'll proceed to contact a lawyer and won't do anything without them, of course, but what exactly are these people doing? I don't have a judgment against me and I haven't been summoned to court. Is there anything more to this than simple bluffing, and how should I be handling it?
April 10, 2012
Consult with your lawyer about this matter. Provide confidential business information to a third party under court order or the recommendation of your lawyer.
Hazel J.
Chicago, IL  |  April 04, 2012
Can an individual after winning a wage assignment in court put a lien on your bank account while the judgment is going through.
April 05, 2012
It is not clear to me what you mean by "while the judgment is going through." If a judgment was obtained against you, which must be the case if a wage assignment was won, then your bank account is vulnerable for a levy that is enforced consistent with Illinois state law. My understanding is that $2,000 in your bank account is exempt from attachment.
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