Methods of Collecting Debts

Prairie State Legal Services			Page Updated: May 25, 2006
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*Sections of This* Publication: [Up] [Creditor's Tactics] [Methods of Collecting Debts] [Collection Agencies] [Lawsuits in Court for Money] [Collection of Court Judgments] [Exemptions that Preserve Money or Property]
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When You Owe Money Section 2 - Creditor's Formal Methods of Collecting Debts		IMPORTANT NOTICE This information is not meant to be legal advice or to replace the advice you should receive from an attorney. There are times when it would be wise to consult a lawyer and other times when it is essential to do so. Always remember, each individual case is unique. This information applies to general consumer situations and should help you to avoid many problems before they happen. If you have additional questions or want legal advice, follow this link to find the Prairie State office nearest you.
SECTION CONTENTS Content Updated: January 2006
Creditors' Formal Methods of Collecting Debts Using Collection Agencies Lawsuits in Court for Money Methods to Collect on Court Judgments	Repossession of Vehicles or Other Goods Wage Assignments Other Remedies for Creditors to Recover Your Property
Creditors' Formal Methods of Collecting Debts Generally, a person who owes a debt cannot be put in jail for failing to pay it. No one goes to jail for owing a debt except in the rare circumstance where a court has directed payment and has found the person in contempt of court for clearly being able to pay but willfully disobeying a court order. However, there are different ways creditors legally can collect money from you when you do not pay a debt for a long period of time. They include:
Using Collection Agencies Back A collection agency is a company or an individual [it could be an attorney] who regularly collects debts of others. A creditor which tries to collect its own debt [such as a hospital or department store's own credit department] is not a collection agency. However, a hospital or any other creditor might hire a collection agency to collect a consumer's unpaid bill. The creditor usually allows the collection agency to keep as its fee a percentage of whatever the collection agency can get from the consumer. Since the collection agency's fee depends on how much it recovers for the creditor, it may be tempted to use harsh tactics with consumers to get them to pay a bill. [See the section in this booklet about Collection Agencies].		Go To Top of Page Creditors' Formal Methods of Collecting Debts Using Collection Agencies Lawsuits in Court for Money Methods to Collect on Court Judgments Repossession of Vehicles or Other Goods Wage Assignments Other Remedies for Creditors to Recover Your Property
Lawsuits in Court for Money If you have not paid a debt, there is always the possibility you might get sued. The first notice you will have that you are being sued in court may be when you receive two legal documents called a Summons and a Complaint. The Complaint is a document prepared by the creditor [the plaintiff] that tells you why you are being sued and how much money the plaintiff claims you [the defendant] owe. The Summons will direct you to appear in court at a particular date and time or will tell you how many days you have to file a written appearance with the clerk's office. If the creditor wins in court, a court order known as a Judgment will be entered against you.
Methods to Collect on Court Judgments Back Once a creditor gets a Judgment against you, if you still do not pay, there are various methods which the creditor can use to enforce the judgment and get money from you. Those methods include: a supplementary proceeding in court which starts by serving you or someone who owes you money with a document known as a Citation to Discover Assets; a wage deduction proceeding, which is to force your employer to withhold part of your wages to pay off the debt; a garnishment proceeding, which is to force the bank [or some other person or entity] which holds your account to turn over to the creditor money in the account; a judgment lien or other enforcement against your real estate, which could result in a forced sale of your real estate or make it difficult for you to sell it later.		Go To Top of Page Creditors' Formal Methods of Collecting Debts Using Collection Agencies Lawsuits in Court for Money Methods to Collect on Court Judgments Repossession of Vehicles or Other Goods Wage Assignments Other Remedies for Creditors to Recover Your Property
Repossession of Vehicles or Other Goods When you buy a car on credit, the contract you sign likely will give the creditor the right to repossess your car if you fail to keep up your payments. This right is called a security interest. Your failure to keep up on payments is called a default. Although this type of arrangement is not as common with types of goods other than vehicles, it is possible that your contract for purchase may give a creditor a security interest in the goods and the right to repossess if you default.		Go To Top of Page Creditors' Formal Methods of Collecting Debts Using Collection Agencies Lawsuits in Court for Money Methods to Collect on Court Judgments Repossession of Vehicles or Other Goods Wage Assignments Other Remedies for Creditors to Recover Your Property
Wage Assignments Back Although these are no longer very common , some creditors may still require that consumers sign a paper called a wage assignment when they make a purchase. This paper gives the creditor the right, without having to bring a lawsuit, to request that your employer turn over a part of your wages if you fail to pay up on that purchase. You can stop a wage assignment very easily by sending the creditor a letter in which you say you are revoking the wage assignment. Keep a copy of the letter. Wage assignments are not to be confused with wage deductions, which are discussed later in this booklet.
Other Remedies for Creditors to Recover Your Property Instead of suing you for money, a creditor may decide to bring a lawsuit to directly recover an item or items of your property. Some of these remedies are known as replevin, attachment, and detinue. Creditors may also seek enforcement of statutory liens such as labor or storage liens or mechanic's liens. For more information about these matters, speak to a lawyer. If you cannot afford a lawyer, call Prairie State Legal Services. Continue to Next Section of Publication		Go To Top of Page Creditors' Formal Methods of Collecting Debts Using Collection Agencies Lawsuits in Court for Money Methods to Collect on Court Judgments Repossession of Vehicles or Other Goods Wage Assignments Other Remedies for Creditors to Recover Your Property


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