In re Porayko
705 F.3d 703
7th Cir.2013Background
- Porayko filed bankruptcy in August 2009 with over $10,000 in a TCF Bank checking account.
- Crowell obtained a $73,000 judgment against Porayko in October 2008 and served a citation to discover assets that month, creating alleged lien implications for the bank account.
- The Trustee contends a citation on the debtor's bank account does not create a lien on the account's value; only a citation on the bank itself can create a lien.
- Crowell sought to lift the automatic stay under 11 U.S.C. § 362(d) to collect from TCF Bank; the bankruptcy judge granted, and the district court affirmed.
- Illinois § 5/2-1402(m) provides that a citation to discover assets creates a lien on nonexempt personal property, including money, and on property in the debtor's possession or control.
- The court agrees the checking account is personal property under § 2-1402(m)(1) and affirms that the lien attaches to the account's value, citing Air Auto Leasing Co.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does a citation to discover assets create a lien on a debtor's bank account value? | Trustee argues no, account is not personal property. | Crowell argues yes, account is personal property under §2-1402(m). | Yes; bank account is personal property and can be liened. |
Key Cases Cited
- Chicago v. Air Auto Leasing Co., 297 Ill.App.3d 873 (1st Dist.1998) (bank account treated as personal property under Illinois statute)
- TM Ryan Co. v. 5350 South Shore, LLC, 361 Ill.App.3d 352 (1st Dist.2005) (supports treating account rights as personal property)
- Citizens Bank of Maryland v. Strumpf, 516 U.S. 16 (Supreme Court 1995) (bank account is a promise to pay; defers payment but not about property characterization)