IBA Compliance Connection

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Under the Illinois Supreme Court’s COVID-19 order on post-judgment proceedings served after March 8, 2020, if a customer has available funds in their account above what is being restricted due to a garnishment or citation, would they still be entitled to the $4K exemption for the funds being held? For example, what if a debtor had an account balance of $6K and a citation comes in for $1K. Would the customer still get to claim the personal property exemption in the $1K being held under the citation? Or what if the customer had an account balance of $8K and $4K was being held under a citation?

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No, we do not believe that the Illinois Supreme Court’s order would entitle a customer to claim a personal property exemption of more than $4,000 in account funds.

As stated in the Illinois Supreme Court’s order, Illinois law provides consumer judgment debtors with a personal property exemption “not to exceed $4,000 in value,” and the order requires that a citation to discover assets or nonwage garnishment proceeding “shall not apply to $4,000 of the judgment debtor’s property held by the Garnishee or Citation Respondent.”

In your first hypothetical, $1,000 of the debtor’s property would be held, but the debtor still would have access to the remaining $5,000 in their account. Because the debtor would have access to at least $4,000 in personal property, as required by the Illinois Supreme Court’s order (and in fact would have access to $5,000), the debtor would not be entitled to any additional exemption amounts. In your second hypothetical, $4,000 of the debtor’s property would be held, and the debtor would not be entitled to any additional exemption amounts above the remaining $4,000 in their account.

For resources related to our guidance, please see:

  • Illinois Supreme Court, M.R. 30370, In re: Illinois Courts Response to COVID-19 Emergency – Impact on Post-Judgment Proceedings (April 24, 2020) (“With respect to all Covered Supplemental Proceedings in which a summons or citation directed to a depository financial institution was served after March 8, 2020, or had an original return date between March 8, 2020, and the date of termination of the Gubernatorial Disaster Proclamations:

    a. If the Garnishee or Citation Respondent holds personal property of a judgment debtor who is a natural person, other than in a business account, and the value of that property exceeded $4,000 (the amount of the personal property exemption contained in 735 ILCS 5/12-705 and 735 ILCS 5/2-1402(b)(1)) when a garnishment summons was served, or any time after a citation was served, the lien imposed by 735 ILCS 5/12-707 or 735 5/2-1402(m), respectively, shall not apply to $4,000 of the judgment debtor’s property held by the Garnishee or Citation Respondent, and the Garnishee or Citation Respondent shall release to the judgment debtor property valued at $4,000 that the Garnishee or Citation Respondent may have frozen, withheld, or seized.

    b. If the Garnishee or Citation Respondent holds personal property of a judgment debtor who is a natural person, other than in a business account, and subparagraph (a) is inapplicable, the Garnishee or Citation Respondent shall release to the judgment debtor any property of the judgment debtor that the Garnishee or Citation Respondent may have frozen, withheld, or seized.”)
     

  • Illinois Code of Civil Procedure, 735 ILCS 5/12-1001(b) (“Personal property exempt. The following personal property, owned by the debtor, is exempt from judgment, attachment, or distress for rent: . . . (b) The debtor’s equity interest, not to exceed $4,000 in value, in any other property; . . .”)