Shipley v. Hoke, 2014 IL App (4th) 130810 provides an exhaustive discussion of Illinois’ post-judgment enforcement rules in the context of a judgment creditor trying to reach debtor assets held by third parties.
It’s key points concerning a citation’s life span include:
– Code Section 2-1402 allows a judgment creditor to prosecute supplementary proceedings for the purposes of examining a judgment debtor and to compel the application of non-exempt assets or income discovered toward the payment of a judgment;
– Section 2-1402(f)(1) contains a “restraining provision” that prohibits any person served with a citation from allowing a transfer of property belonging to a judgment debtor that may be applied to the outstanding judgment amount;
– If someone violates the restraining provision, the Court can punish the violator by holding him in contempt or entering a money judgment against him in the amount of the property he transferred;
– A third-party citation must be served in the same manner a (“first party”) citation is served (e.g. either by personal service or certified mail);
– Supreme Court Rule 277(f) provides that a citation proceeding automatically terminates six months from the date of the respondent’s first personal appearance unless the court grants an extension of the citation;
– This six-month rule is an affirmative defense that must be raised by a citation respondent or else it’s waived;
-Rule 277(f)’s purpose is to prevent a creditor from harassing a judgment debtor or a third party subject to a citation proceeding and is designed to provide an incentive for creditor’s to diligently work to discover debtor assets;
– While a court can retain jurisdiction over a turnover order entered before but not complied with until after the expiration of the six-months, the court does not maintain jurisdiction to enforce any restraining provision violations past that six-month mark.
– Rule 277 does permit a creditor to request an extension of the six-month limitation period indefinitely to fit the needs of a given case.
(¶¶ 78-81, 92-93).
Take-away: While I often serve bank respondents with third-party citations by certified mail (since banks usually aren’t motivated to evade service), a judgment creditor should serve any non-bank respondent by personal service; either via county sheriff or a special process server.
In addition, the creditor should keep track of when a judgment debtor first appears in response to a citation. If it looks like the creditor’s post-judgment case isn’t going to be finished at the six-month mark, he should move to extend the citation for as long as necessary to complete his examination of the debtor and any third-party(ies).