Collecting on a judgment becomes significantly more challenging when you can't prove the debtor currently possesses the assets you're seeking. A recent Illinois case demonstrates exactly how this burden of proof can derail an otherwise promising collection effort.

The Challenge of Tracing Insurance Proceeds

In Montenegro v. Franchini, 2025 IL App (3d) 240140-U, judgment creditor Ruben Franchini thought he had found the golden ticket to collecting his $45,000 punitive damages award. Montenegro, the judgment debtor who operated a motorcycle repair shop, had received a $21,955 insurance check for motorcycle repairs—nearly half of what was owed.

The facts seemed straightforward: Montenegro tried to deposit the check into his sole proprietorship account, but the bank rejected it. He then opened a new LLC account for “BMK Fabrications” and deposited the funds there, claiming he used the money to purchase motorcycle parts.

Franchini moved for a turnover order, believing this insurance payment could help satisfy his judgment. However, both the trial court and the Illinois Appellate Court disagreed.

The Burden of Proof Standard

The Illinois Appellate Court clarified an important principle: proving a debtor received money is not the same as proving they currently possess it. The court emphasized that judgment creditors must demonstrate that debtors are in actual possession of the specific assets sought at the time of the hearing.

While insurance proceeds can be subject to citation proceedings, Franchini's case failed on the crucial issue of current possession. The evidence showed that Montenegro's initial deposit was rejected, and Montenegro testified that he had spent the funds on motorcycle parts for his business. The court concluded there was “no ‘$21,955.00' to turnover.”

This case highlights the importance of timing and thorough evidence gathering in judgment collection. The courts still treat debt collection as a cat and mouse game, where creditors who miss their chance at one asset are expected to get back at it and find another.

Strategic Considerations for Future Cases

This case reveals several important considerations for judgment creditors:

Documentation Requirements

Creditors should demand comprehensive documentary proof of how disputed funds were spent. Bank records, receipts, and invoices can help trace money and potentially reveal recoverable assets in the form of inventory or equipment.

Timely Citation Proceedings

Properly serving debtors with citation papers can legally restrict their ability to spend or transfer assets. This creates grounds for sanctions if debtors violate court orders by disposing of assets before turnover hearings.

Procedural Knowledge

Citation proceedings require precise legal procedures and thorough understanding of evidentiary requirements. Quick, strategic responses are often essential for success.

Asset Tracing and Alternative Recovery Methods

Experienced judgment collection attorneys understand that when cash is no longer available, the focus should shift to what it became. In Montenegro's case, the motorcycle parts purchased with the insurance proceeds could represent recoverable business inventory.

The principle is straightforward: money often transforms rather than disappears entirely. Insurance proceeds might become business equipment, inventory, real estate improvements, investment accounts, or other tangible assets that can be identified and potentially recovered.

Key Takeaways for Legal Practitioners

Montenegro v. Franchini demonstrates why judgment collection requires both legal knowledge and careful case preparation. Success depends on acting promptly when assets are discovered, building strong evidentiary foundations before seeking turnover orders, understanding procedural tools like citation restrictions, and considering alternative recovery methods when direct collection isn't possible.

Effective judgment collection requires strategic planning, quick action, and thorough understanding of applicable procedures. Missed deadlines or evidentiary gaps can significantly impact recovery efforts.

Professional Judgment Collection Services

Judgment collection involves complex legal procedures, strict timing requirements, and detailed knowledge of evidentiary standards. Understanding these requirements and executing them effectively can make the difference between successful recovery and uncollectible debt.

At CTM Legal Group, we focus on the practical aspects of judgment enforcement. We have extensive experience with citation procedures, evidence requirements for turnover orders, and alternative recovery methods when traditional approaches aren't viable. We have collected millions of dollars on judgments that were thought by our clients or other attorneys to be uncollectable.

In a quick phone call we can usually tell you whether your judgment has a good chance of being collected, and map out an optimal plan for doing so. If you need assistance with judgment collection, contact CTM Legal Group to discuss your specific situation and explore available options for recovery.