On January 1, 2026, the Illinois Receivership Act (the Act) takes effect. The Act builds upon a patchwork of laws in Illinois to create a broad framework for creditors and other parties in interest for the appointment of a receiver over most types of real property, personal property and businesses. Here are six important things to know about the Act.

1. A receiver may be appointed as a primary remedy, pre-judgment and post-judgment, in cases involving: (a) lien enforcement where property is at risk of waste or impairment; (b) fraud; (c) a company with deadlocked management; and (d) a company that is insolvent or not paying its debts.

Notably, the Act does not modify a mortgagee’s rights under the Illinois Mortgage Foreclosure Act to seek the appointment of a receiver. Rather, the new Act expands the circumstances under which a receiver can be appointed and formalizes the processes and broadens the powers associated therewith.

2. The court may appoint a receiver without notice if circumstances warrant.

3. Once a receiver is appointed, the court has exclusive jurisdiction: (a) over all receivership property wherever it is located; and (b) over all controversies related to or arising from the receivership and its property.

4. The receiver has broad powers over receivership property, including to: (a) collect, manage and protect it; (b) operate a business by, among other things, incurring debt and paying expenses; (c) assert a claim or defense for the owner; (d) compel a party to produce records and/or be examined under oath; (e) engage professionals such as attorneys and accountants; and (f) transfer it by sale, lease or other disposition.

5. Upon notice from the receiver, creditors are required to timely file a claim against the receivership and if they fail to do so, the claim may be waived.

6. The court may order a receiver’s fees and expenses to be paid from: (a) the receivership property; (b) the person requesting appointment; or (c) a person whose conduct justified the appointment such as the owner.

In sum, Illinois receivers will soon have powers that could benefit secured and unsecured creditors in a variety of tricky situations.