Of the Northern District of Indiana, sitting by designation. 

In the

United States Court of Appeals

For the Seventh Circuit

No. 12-2777

IN THE MATTER OF:

WILLIAM N. PORAYKO,

Debtor.

APPEAL OF:

EUGENE CRANE, Trustee

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 10 C 2630—James B. Zagel, Judge.

ARGUED JANUARY 14, 2013—DECIDED JANUARY 28, 2013

Before EASTERBROOK, Chief Judge, HAMILTON, Circuit

Judge, and MILLER, District Judge.



EASTERBROOK, Chief Judge. When William Porayko

entered bankruptcy in August 2009, he had more than

$10,000 in a checking account at TCF Bank. Travis Crowell

claims that money. Crowell obtained a $73,000 judg-
2 No. 12-2777

ment against Porayko in October 2008; that same month

Crowell served Porayko with a citation to discover

assets. In Illinois, a citation creates a lien. 735 ILCS 5/2-

1402(m). The competing claimant is Eugene Crane, as

Trustee for the benefit of Porayko’s creditors. The Trustee

contends that a citation served on the owner of a bank

account does not create a lien on the value of that

account; only a citation directly on the bank can do that,

the Trustee maintains. (Crowell did serve a citation on

TCF Bank in June 2009, so close to the bankruptcy’s

commencement that any lien against the Bank is subject

to the Trustee’s avoiding powers. 11 U.S.C. §547(b)(4)(A).)

Crowell asked Bankruptcy Judge Hollis to lift the

automatic stay, 11 U.S.C. §362(d), so that he could

collect from TCF Bank while the bankruptcy proceeds.

The parties agree that it is proper to lift the stay if, and

only if, the citation served on Porayko creates a lien on

the value of the checking account. Judge Hollis granted

the motion, and the district court affirmed. We must

decide whether Illinois law treats a citation served on a

judgment debtor as a lien on the value of the debtor’s

bank account.

Section 5/2-1402(m) provides that a citation to discover

assets creates a lien on all “nonexempt personal property,

including money, choses in action, and effects of the

judgment debtor”. Paragraph (1) adds that this includes

“all personal property belonging to the judgment debtor

in the possession or control of the judgment debtor or

which may thereafter be acquired or come due to the

judgment debtor”. Judge Hollis concluded that the value
No. 12-2777 3

of a checking account is “personal property” within the

depositor’s “control”. This conclusion has the support of

the only state decision that has mentioned the subject.

Chicago v. Air Auto Leasing Co., 297 Ill. App. 3d 873, 878

(1st Dist. 1998); cf. TM Ryan Co. v. 5350 South Shore, LLC,

361 Ill. App. 3d 352 (1st Dist. 2005).

The Trustee asks us to disagree with Air Auto Leasing

on the ground that the appellate court’s statement is

unreasoned. According to the Trustee, the Supreme

Court of Illinois is likely to rule otherwise. The Trustee

relies on the observation in Citizens Bank of Maryland v.

Strumpf, 516 U.S. 16, 21 (1995), that a bank account “consists of nothing more or less than a promise to pay,

from the bank to the depositor.” The account’s value

therefore cannot be “personal property”, the Trustee

insists—which means, he tells us, that the vital issue is

whether a checking account is a “chose in action.” That

question the Trustee answers in the negative, insisting

that it is only a “potential” chose in action (which

would ripen should the bank refuse to pay).

Strumpf did not present the question whether a bank

account is “personal property” for the purpose of §5/2-

1402(m) or a similar state law. It held that a bank does

not violate §362 by deferring payment so that it can offset

an account’s value against a debt owed to it. The Court’s

point is that a bank is not a warehouse, as if its vault

(like Gringotts Bank) held stacks of specie labeled for

each depositor. A bank’s delay in complying with a

payment instruction does not take any property away

from the depositor and so does not violate the auto-
4 No. 12-2777

matic stay. This does not speak to the question whether

an account holder’s rights are “personal property.” Certainly the rights are not real property! A bank account

may be an intangible interest, but intangible rights (for

example, patents or copyrights) are still personal property. The Illinois statute asks what property rights

a judgment debtor “controls”; it is sensible to say that a

checking account’s holder controls the right to designate

who receives the funds on deposit, which makes its value

a form of “personal property” under Illinois law.

We need not resolve the parties’ debate about the

meaning of “chose in action”. It is enough to agree with

the bankruptcy court that an account is “personal property” under the definition in §5/2-1402(m)(1). The Trustee

has not identified any decision in Illinois—or for that

matter any other state—concluding that a bank account

is not personal property for the purpose of a statute

similar to §5/2-1402(m). It is therefore not surprising

that Air Auto Leasing was curt; the judges must have

thought the proposition obvious.

Indeed, if the Trustee were right, then serving a citation on a bank would be as useless as serving one on a

debtor. If the value of an account is not “personal property” from the debtor’s perspective, it is not “personal

property” from a bank’s either. The bank sees an account

as a debt to its client—as a liability, not an asset. The

bank’s assets lie in what it has done with the money (for

example, lent it to a business or homeowner); the borrower’s note promising to repay is the bank’s property.

Bank accounts are an important form of personal wealth;
No. 12-2777 5

we cannot believe that Illinois has placed them beyond

the reach of judgment creditors, and done so in such

an obscure way.

A prudent judgment creditor will serve the judgment

debtor’s bank as well as the judgment debtor personally;

otherwise the bank will go on paying the judgment

debtor’s checks, and the account may be depleted.

Crowell might have secured a larger payment had it

served TCF Bank, as well as Porayko, in August 2008.

But the $10,000 that remained in August 2009, when

bankruptcy began, was part of Porayko’s personal

property and covered by a lien superior to the Trustee’s.

The judgment therefore is

AFFIRMED.

1-28-13