Non-wage garnishment is the judgment creditor's attachment, after judgment, of the judgment debtor's property, other than wages, which is in the possession, custody or control of third parties.

Example: A creditor files a non-wage garnishment to attach funds your client has deposited in the local bank. Procedural rules for this are set out at 735 ILCS 5/12-701 et seq. 

NOTE: Creditors frequently use a Citation to Discover Assets, Non-Wage, as set out in 735 ILCS 5/2-1402, to accomplish the same goals as a non-wage garnishment.

[no-lexicon]Wage deduction[/no-lexicon] order

A wage garnishment, more properly referred to as a wage deduction order, is the use of legal process by the judgment creditor, after judgment, to attach a portion of the judgment debtor's wages. Procedural rules for this are set out at 735 ILCS 5/12-801 et seq.

NOTE: Creditors may use a Citation to Discover Assets (Wages), as set out in 735 ILCS 5/2-1402, to accomplish the same goals as a wage garnishment. 

Scope and practice

Garnishment laws and statutes

Compliance

Garnishment laws must be strictly complied with by judgment creditors. The judgment creditor must meet all the statutory requirements or a garnishment judgment will not be entered. In Re Marriage of Souleles, 444 N.E. 2d 721 (1st Dist. 1982); Cole v. Shanior, 387 N.E. 2d 860 (1st Dist. 1979). The requirements include:

• Parties with an interest in garnished property must be given notice and an opportunity to present their claims. Garnishment judgment issued in the absence of such notice is invalid. In Re Marriage of Souleles, supra;
• Judgment debtor must be given an opportunity to pay the judgment prior to the use of garnishment remedy by the judgment creditor. In Re Marriage of Souleles, supra;
• In non-wage garnishments, 735 ILCS 5/12-701 requires the judgment creditor, or other person, to file an affidavit stating that the affiant believes the garnishee is indebted to the judgment debtor or has property of the judgment debtor. Failure to file such affidavit invalidates the garnishment. Dale Jewelers Inc. v. Steiner, 194 N.E.2d 509 (2nd Dist. 1963);
• In wage deduction practice, 735 ILCS 5/12-805 provides that the judgment debtor shall be given a notice, at the time the wage deduction proceeding is commenced, of the amount of the judgment, the creditor's name, the maximum amount of wages that may be deducted, and that the debtor may request a hearing to dispute the wage deduction because the wages are exempt;
• Under 735 ILCS 5/12-807, if an employer fails to file their answer to a wage deduction summons, the court may enter a conditional judgment against the employer for the amount due from the judgment debtor. The judgment creditor must then serve a summons to confirm the conditional judgment on the employer, giving the employer an opportunity to show cause why the judgment should not be made final against it. See, All-Steel Employees Credit Union v. Singh, 345 Ill.App. 3d 1005 (2d Dist. 2004);
• The employer served with a wage deduction summons must withhold from the employee/judgment-debtor all non-exempt wages due. 735 ILCS 5/12-808; and
• The wage deduction order stays in place until the judgment and all costs have been satisfied. 735 ILCS 5/12-808(b).

Construction and interpretation

Garnishment statutes must be strictly construed so as not to extend to cases beyond the intended realm of application. Powell v. Prudence Mutual Casualty Co., 232 N.E.2d 155 (1st Dist. 1967). For example:

• Compensation paid to a judgment-debtor under a consulting contract constituted wages within the meaning of Section 12-801 of the Wage Deduction Act and thus was subject to the exemption protections afforded by the Act. California-Peterson Currency Exchange, Inc. v. Friedman, 316 Ill. App.3d 610 (1st Dist. 2000);
• State and municipal employees are subject to wage garnishment. First Finance Co. v. Pellum, 62 Ill. 2d 86 (1974). But sovereign immunity precludes a circuit court from entering a conditional judgment against the State of Illinois. Aurora National Bank v. Simpson, 454 N.E.2d 1132 (2nd Dist. 1983);
• Where a joint bank account is garnished, the (non-judgment debtor) joint party to the bank account may appear in the garnishment proceeding and prove that part or all of the joint bank account belongs to the non-judgment debtor and therefore is not subject to the garnishment. Leaf v. McGowan, 13 Ill. App.2d 58 (1st Dist. 1957). See also Highsmith v. Dept. of Public Aid, 345 Ill. App.3d 774 (2d Dist. 2004); Society of Lloyd's v. Collins, 284 F.3d 727 (7th Cir. 2002); 735 ILCS 5/12-710; and 11 A.L.R.3d 1465;
• Property or funds in custodia legis, in the custody of the law, are not subject to garnishment. Collosseo v. Lynn, 410 N.E.2d 577 (2nd Dist. 1980), bail bond money in possession of the clerk of court not subject to garnishment;
• Funds which the judgment debtor's agent holds in trust for a third party are not subject to garnishment. Baird v. Senne, 300 N.E. 2d 554 (1st Dist. 1973);
• Beneficial or equitable interests or estates are not subject to garnishment. Citizens National Bank of Chicago v. Grossman, 21 Ill. App. 2d 573 (1st Dist. 1959);
• A safe deposit box's contents are subject to garnishment. Morris v. Beatty, 55 N.E.2d 830 (1st Dist. 1944), revs'd on other grounds, 62 N.E.2d 478 (1945);
• Property that has been assigned (or otherwise transferred) by the judgment debtor in good faith, prior to the service of the garnishment process, is not subject to garnishment by the judgment creditor. Iser Electric Co. v. Ingran Construction Co., 48 Ill. App. 3d 110 (2d Dist. 1977); and
• A judgment-creditor can garnish an insurance company that has proceeds of a policy of the judgment-debtor. In Roth v. Kaptowsky, 401 Ill. 424 (1948). An insurance company was paying out $100 monthly to a judgment-debtor as proceeds of a life insurance policy. The Supreme Court allowed the garnishment of the monthly payments, so that the insurance proceeds were thereafter paid monthly to the judgment-creditor.

The underlying judgment

The garnishment action is completely dependent on the validity of the underlying judgment. Zimek v. Illinois National Casualty Co., 19 N.E.2d 620 (1939). Further:

• If the court that entered the underlying judgment lacked jurisdiction to do so, the judgment is void and may be attacked at any time or in any court. R.W. Sawant & Co. v. Allied Programs Corp., 489 N.E.2d 1360 (1986). Thus a garnishment may be challenged where the court which issued the underlying judgment lacked personal jurisdiction over the defendant, Four Lakes Management v. Brown, 472 N.E.2nd 1199 (2nd Dist. 1984), or lacked subject matter jurisdiction over the case. Buckley v. Chicago Bd. of Options Exchange, Inc., 440 N.E.2d 914 (1st Dist.1982);
• Where a judgment has been vacated (e.g. pursuant to 735 ILCS 5/2-1301 and 2-1401), no garnishment may proceed. Genden v. Bailen, 275 Ill. App. 382 (1st Dist. 1935);
• A dormant judgment will not support a garnishment action. Ring v. Palmer, 32 N.E.2d 956 (4th Dist. 1941). With certain exceptions, a judgment becomes dormant after 7 years. 735 ILCS 5/12-108;
• If the underlying judgment has been satisfied, no garnishment action may proceed. Cerone v. Clark, 110 Ill. App. 2d 301, 249 N.E.2d 186 (1st Dist. 1969);
• In a garnishment proceeding the court may examine whether the underlying judgment was void for lack of jurisdiction or whether it has been satisfied; but the court may not consider a defense that was never raised in the trial court. Security State Bank of Hamilton v. Kimball, 319 Ill. App. 3d 635 (5th Dist. 2001); and
• Formal pleadings may not be necessary to raise defenses in garnishment actions. Chertack v. Santangelo, 6 Ill. App. 3d 201 (1st Dist. 1972); Cerone v. Clark, 110 Ill. App. 2d 301, 249 N.E.2d 186 (1st Dist. 1969).

Exemption

At any time on or before the return date, the judgment debtor may ask for a hearing to dispute the garnishment or to claim exemptions for certain funds or property. 735 ILCS 5/12-711(b).

Wage order deductions and citations to discover assets

• The maximum wages subject to garnishment is the lesser of 15% of gross wages; or the amount by which weekly wages, minus deductions required by law, exceed 45 times the federal minimum hourly wage, 45 x $7.25 = $326.25, or 45 times the state minimum wage, 45 x $13 = $630, whichever is greater (these rates are as of 2024). 735 ILCS 5/12-803. The court no longer has discretion to set a lesser amount, based on the circumstances of the debtor;
• Benefits and refunds payable by pension or retirement funds are exempt and not subject to deduction orders. 735 ILCS 5/12-804. See also the exemptions listed in the section below for non-wage garnishments;
• Under Illinois law, garnishments to enforce child support or maintenance orders may claim as much as 65% of a wage-earner's wages. Commonwealth Edison v. Denson, 144 Ill. App. 3d 383, 494 N.E.2d 1186 (3rd Dist. 1986). But a family support order garnishment may not be considered independently of a judgment creditor's wage garnishment for purposes of determining what percentage of earnings may be withheld. Commonwealth Edison v. Denson, supra. Therefore, if 15% or more of the debtor's gross wages are being garnished pursuant to a support or maintenance order, no additional funds may be withheld under a wage deduction order. Commonwealth Edison v. Denson, supra;
• As between garnishments of the same type, the prior in time is to be satisfied first. E.g. Commonwealth Edison v. Denson, supra; 735 ILCS 5/12-808. As between judgment-creditor garnishments and support-order garnishments, priority is given to support-orders regardless of the timing. E.g. Commonwealth Edison v. Denson, supra; 735 ILCS 5/12-808; and
• Any person who wrongfully causes a wage deduction summons to issue is liable for actual damages and attorney fees. 735 ILCS 5/12-817. In Wiley v. Howard, 180 Ill.App.3d 721, 536 N.E.2d 186 (2d Dist 1989), a creditor who mistakenly effected a wage deduction summons where the judgment had already been satisfied was held liable under Section 817. In Schak v. Blom, 334 Ill. App. 3d 129 (1st Dist. 2002), attorney fees and interest were awarded to the victim of a wrongful garnishment.

Non-Wage Garnishments

State law

• The burden of establishing the exemption rests with the debtor.  Internal Medicine Associates of Decatur S.C. v. Patterson, 244 Ill. App. 3d 704, 708 4th Dist.1993);
• State law exempts from garnishment workers' compensation awards 820 ILCS 305/21; certain damages in medical malpractice cases (735 ILCS 5/2-1716); life insurance policies 215 ILCS 5/238; pensions, disability payments and annuities under provisions of the Illinois Pension Code 40 ILCS 5/3-144.1, 5/9-228 and 5/16-190 and reimbursements for services due from foster parenting 20 ILCS 505/5 (n);
•  735 ILCS, 5/12-1001(b) exempts debtor's interest in $4000 worth of personal property--any $4000 worth of property, including cash, designated by the debtor, the "wild card" exemption; 
• Section 12-1001(c) exempts $2400 value of one automobile. The court in Matter of Barker, 768 F.2d 191 (7th Cir. 1985) allowed the debtor to "stack" the then $2000 personal property exemption on top of the $1200 exemption to protect a vehicle up to $3200. Note that this exemption, as all Section 12-1001 personal property exemptions, only applies to property used for personal rather than business purposes. See also, Medaris v. Commercial Bank of Champaign, 515 N.E.2d 1218 (1987) ruling that the Section 12-1001(c) exemption does not apply to an auto acquired less than five months before the debtor filed a bankruptcy action;
• Section 12-1001(d) exempts $1500 worth of worth of implements, professional books and tools of trade of debtor. Tools in excess of $1500 may be exempted under "wild card" provision. In re Allman, 58 B.R. 790 (1986);
• Section 12-1001(f) exempts all proceeds payable because of death of insured person and the net cash value of all life insurance policies or annuity contracts payable to a spouse of an insured, or to any other person dependent upon the insured; and
• Section 12-1001(g and h) exempts:
  • Benefits from social security, unemployment compensation, welfare, veteran's benefits, and disability or other illness benefits;
  • Alimony, support or separate maintenance to the extent reasonably necessary for the support of the debtor and his/her dependents. See Broadway Bank v. Kakos, 513 N.E.2d 97 (1st Dist. 1987);
  • Wrongful death recoveries;
  • Payment under a life insurance contract that insured the life of someone for whom the debtor was a dependent, to the extent reasonably necessary for the support of the debtor or his/her dependents; see Dowling v. Chicago Options Associates, Inc., 2006 WL 782861 at *7 1st Dist. March 28, 2006, life insurance proceeds with a trust listed as beneficiary are not exempt;
  • Payments up to $15,000 in value for personal injury of the debtor or of a person of whom the debtor was a dependent; and
  • Crime victim award and any restitution payments made pursuant to the Civil Liberties Act of 1988 and the Aleutian and Pribilof Island Restitution Act.

Federal law

Federal law exempts certain benefit payments from garnishment:

• Social security benefits 42 U.S.C. § 407(a).
• Railroad Retirement Act benefits 45 U.S.C. § 231m(a).
• Veterans' benefits 38 U.S.C. § 3101(a); see Porter v. Aetna Casualty & Surety Company, 370 U.S. 159 (1962).
• Proceeds of student loans Telford v. Tice, 488 N.E.2d 308 (3rd Dist. 1986).

"Tracing" exempt assets

Certain exempt assets retain their exempt status even if the character of the asset changes;

• Under 735 ILCS 5/12-1001(h), those exempted assets listed in IV (B) 5(c)-(f) above retain their exempt status for 2 years after the debtor's right to receive such payment accrues. And property traceable to such payments shall also be exempt for 5 years. In addition, money due a debtor from the sale of any personal property that was exempt from judgment or attachment at the time of the sale, is exempt from attachment and garnishment to the same extent had the property not been sold.  735 ILCS 5/12-1001(i);
• In In re the Estate of Moses Merritt, Jr., 272 Ill. App. 3d 1017 (1st Dist. 1995), the court ruled that social security benefits, which had been commingled in a bank account with other funds, retained their exemption, so long as they were reasonably traceable. In Fayette County Hospital v. Reavis, 169 Ill. App.3d 246 (5th Dist. 1988) the court ruled that although social security benefits which were used to purchase a certificate of deposit did not retain their exempt status under Illinois law, they remained exempt by virtue of  federal law. See also Philpott v. Essex County, 409 U.S. 413 (1973);
• In Shrader v. Maultz, 374 N.E.2d 819 (1st Dist. 1978) the court ruled that Railroad Retirement benefits deposited in a bank account retained exempt status;
• In Bucktown Partners v. Johnson, 456 N.E.2d 703 (1st Dist. 1983), the court ruled that welfare benefits deposited in a bank account could not be garnished;
• In Internal Medicine Associates of Decatur S.C. v. Patterson, 244 Ill. App. 3d 704 (4th Dist. 1993), the creditor argued that when VA pension benefits were commingled with other funds in a bank account, they were transmuted and thus subject to garnishment. The Court ruled that unless the funds had been converted into a permanent investment, they were still exempt;
• 735 ILCS 5/12-1006 exempts a debtor's interest in pensions, annuities, benefits, distributions, refunds of contributions or other payments under certain retirement plans. Compare to 735 ILCS 5/12-704 which exempts from garnishment benefits and refunds payable by pension or retirement funds and any assets of employees held by such funds. Cf. MacKey v. Lanier Collections Agency, 486 U.S. 825 (1988);
• By virtue of 205 ILCS 105/4-6, savings accounts at savings and loan associations, with certain exceptions, may be exempt from garnishment. See In re Marriage of Souleles, 444 N.E.2d 721 (1st Dist. 1982); and
• Under 735 ILCS 5/12-906, proceeds of up to $15,000 from the sale of a homestead are exempt for one year, and if reinvested in a homestead, are exempt as was the original homestead. A husband and wife would have a total $30,000 homestead exemption.

Timing of raising the exemptions

The wage deduction statute says the exemptions must be claimed on or before the return date. 735 ILCS 5/12-711(b). If wages or property are being levied pursuant to a third-party citation proceeding, 735 ILCS 5/2-1402(b) sets no time limit for claiming exemptions. Dowling v. Chicago Options Associates, Inc., 2006 WL 782861 at *5 (1st Dist. March 28, 2006).

Wrongful citation to discover assets is a [no-lexicon]tort[/no-lexicon]

Nothing in the code authorizes the entry of a judgment at a supplementary proceeding against a third party who does not possess assets of the judgment debtor. Wrongful garnishment of property not belonging to the debtor subjects the collector to an action for damages and attorney fees. Schak v. Blom, 334 Ill.App.3d 129 (1st Dist. 2002); Foley Brokerage Co. v. Feldman Brothers Comm'n, Inc. (1947), 330 Ill. App. 372, 375.