When You Owe Money
Table of Contents, Introduction and Definitions
A Publication of Prairie State Legal Services
Revised: January 19, 2006
Content Updated: January 2006
About These Materials
If you owe money to a creditor, the following articles will tell you what the creditor can do lawfully to collect from you. It will tell you some of the common methods and tactics which creditors use to collect debts. It will give you important information to deal with these methods. It will explain your rights with regard to collection agencies and will tell you how to respond to a collector's lawsuit. It will explain what a court judgment means and how to protect your money and property when a creditor tries to collect on a court judgment.
The following 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. The 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, contact the Prairie State Legal Services office nearest you.
First - A Few Definitions
Section 1 - Dealing with Several Common Creditor's Tactics
Three Ways Creditors Try to Push Consumers Around
Dealing With Intimidation and Harassment
Dealing With Reports to a Credit Reporting Agency
When It's Good to Refinance and When It Isn't
Section 2 - Creditor's Formal Methods of Collecting Debts
Some Legal Terms
Section 3 - Collection Agencies
What Collection Agencies Cannot Do
What Collection Agencies Must Do
What You Can Do if the Collection Agency is Breaking the Law
Section 4 - Lawsuits in Court for Money
Will a Creditor Sue on a Debt?
How to Respond to a Collector's Lawsuit
How to Present Your Defenses or Counterclaims to the Court
The Judgment
How to Appeal
Section 5 Creditor's Methods to Collect Court Judgments
Citation to Discover Assets [on the Debtor]
Citation to Discover Assets [on Third Parties]
Wage Deductions
Non-Wage Garnishment
Judgment Liens and Enforcement of Judgments Against Real Estate
Section 6 - Exemptions Which Prevent Creditors from Taking Your Money or Property
What Are Your Exemption Rights?
Putting Money from an Exempt Source In the Bank
How to Claim Your Exemption Rights
A Few Definitions
The following terms are used throughout "When You Owe Money"
- Consumer or Debtor - the person who owes money to a creditor. Most frequently, the debt arises from a sale or from a loan.
- Creditor - the person or entity to whom you owe money. A creditor may be the seller or it may be a bank or other financial institution which holds your contract.
- Default means that you have not kept up on your payments as they have come due.
- Exemptions - certain kinds and amounts of your property or money which the law says you can stop creditors from taking. Creditors cannot take exempt property.
- Security Interest - certain rights in your property which you give to a creditor. This happens when you put the property up as collateral to get a loan or to get credit for a purchase. Sometimes the property you use for collateral is the item you are borrowing money to buy, and sometimes it is other possessions you already own. By giving a security interest in an item of property, you are giving the creditor the right to repossess it if you default.
- Plaintiff - Person or company who sues.
- Defendant - Person who is sued.
- Complaint - Legal document that says who plaintiff is suing and what plaintiff wants from defendant.
- Summons - Document that tells you to come to court or to file an answer to the complaint by a certain time.
- Judgment - What the judge decides. If the judge decides you owe money, there will be a judgment against you.
- Citation to Discover Assets - The legal document that tells the person who already has a judgment against them to come back to court and answer the creditor's questions about income and property.
Copyright 2002 Prairie State Legal Services, Inc.
ALL RIGHTS RESERVED
For reprint permission contact Prairie State Legal Services, Attn:
Publications
975 N. Main Street, Rockford, IL 61103, (815) 965-2134,
publications@pslegal.org