Collections

Execution of Judgments

Collecting Your Money

A.      Wage Garnishments

  1. Non-Wage Garnishments
  2. Subpoena for Creditor’s Examination
    1. Judgment Liens
  3. Personal Property Seizure
  4. Liens on Real Estate
  5. Recovering Collateral (Replevins/Repossessions)

Wage Garnishment

Periodic Garnishment

Periodic Writs of Garnishment are most often used to collect a portion of wages from a debtor, but also apply to all periodic payments to be paid during the life of the Writ (90 days from issuance).  They apply not just to wages, but also to periodic contract payments (such as to “independent contractors” and “1099 employees.”

When Available: 21 days post-judgment (MCR 2.614(A)(1)).

Governing Law: Statute:  MCL 600.4001 and following sections.

Michigan Court Rule 3.101.

Fees:

$15.00 filing fee to Court

$  6.00 fee to Garnishee

SCAO Form: Request and Writ for Garnishment – MC12

http://www.courts.michigan.gov/SCAO/courtforms/garnishment/mc12.pdf

Garnishee Disclosure – MC14

http://www.courts.michigan.gov/SCAO/courtforms/garnishment/mc14.pdf

Notes

Applies to all periodic payments, not just “wages.”  This includes “1099 employees” (an oxymoronic term),  “independent contractors” and the like.  Any payments which come due the Defendant from the Garnishee during the life of the Writ should be withheld (in part or in full, depending on whether it is “wages”).

A Writ of Garnishment is one of the few documents to be filed with the Court that may contain complete Social Security Number.  In fact, to be effective, a writ should always include the Social Security Number, so that the garnishee (employer) can confirm the individual whose payments should be garnished.

Interrogatories to Garnishee:  Within 14 days after service of the Disclosure on Plaintiff, Plaintiff may serve Interrogatories on the Garnishee, regarding the Defendant.  Most often, a few questions directed to the Garnishee may be helpful if Defendant is no longer employed by or affiliated with the Garnishee, and you want to know a last known address and the identity of the new employer.

Priority:  A Writ for a civil debt cannot take priority over an order for child support withholding, some tax debts, or a Writ which was served prior in time.  If there are sufficient funds for withholding over and above the protected wage threshold, funds may be withheld and paid pursuant to multiple writs.

Life of Writ:  A periodic Writ of Garnishment expires 90 days after its issuance.  Another periodic Writ against the same garnishee cannot be issued until the outstanding Writ has expired.  If another creditor “slips in” between the expiration of one writ and the service of a new writ, that creditor can take priority over you, for wage withholding during the life of that creditor’s writ.

Liability of Garnishee:  If the Garnishee does not disclose, you may seek entry of a judgment against the Garnishee directly.  MCR 3.101(O).

Interrogatories to Garnishee:  Within 14 days after Garnishee’s service of the Disclosure, Plaintiff may serve Interrogatories on the Garnishee.  MCR 3.101(L)(1).

Non-Wage Garnishment

Non-Periodic Garnishment

A Non-Periodic Writ of Garnishment is most often used against bank accounts, or against other parties who are in control of assets belonging to or held for the debtor.  A non-periodic writ is not a continuing obligation.  If the garnishee has an asset belonging to or due the debtor at the time it receives the Writ, the garnishee cannot deliver that property to the defendant, but must seize and hold it for the garnishee and, if no court order to the contrary is received, turn it over to the Plaintiff (or Plaintiff’s counsel).

When Available: 21 days post-judgment (MCR 2.614(A)(1)).

Governing Law: Statute:  MCL 600.4001 and following sections.

Michigan Court Rule 3.101

Fees: $15.00 filing fee to Court

$  1.00 fee to garnishee

SCAO Form: Request and Writ for Garnishment – NonPeriodic – MC13

http://www.courts.michigan.gov/SCAO/courtforms/garnishment/mc13.pdf

Garnishee Disclosure – MC14

http://www.courts.michigan.gov/SCAO/courtforms/garnishment/mc14.pdf

Notes

Writ of Garnishment is one of the few documents to be filed with the Court that may contain complete Social Security Number.  In fact, to be effective, a Writ should always include the Social Security Number, so that the garnishee (bank, credit union, or other garnishee) can confirm the individual whose payments should be garnished.

Interrogatories to Garnishee:  Within 14 days after service of the Disclosure on Plaintiff, Plaintiff may serve Interrogatories on the Garnishee, regarding the Defendant.  Most often, a few questions directed to the Garnishee on a Non-Periodic Writ may be helpful if the Defendant no longer has property or accounts belonging to the Defendant.

Liability of Garnishee:  If the Garnishee does not disclose, you can seek entry of a judgment against the Garnishee directly.  MCR 3.101(O).

Other property:  A non-periodic Writ can be used to attach and seize things other than money; it can be used to seize things like stock certificates and other tangibles, as well.

Subpoena for Discovery Examination

Order to Appear

A Subpoena for creditor’s exam (Subpoena–Order to Appear and/or Produce) is used primarily to compel the Defendant’s appearance at court and his or her production of documents related to his or her income and assets.

When Available: 21 days post-judgment (MCR 2.614(A)(1)).

Governing Law: Statute:  MCL 600.6110

Michigan Court Rule 2.506

Fees: $15.00 filing fee to Court

Service fee to process server for personal service

SCAO Form: Subpoena – Order to Appear and/or Produce – MC11

http://www.courts.michigan.gov/SCAO/courtforms/general/mc11.pdf

Notes

The Court (not an attorney) must issue a subpoena to appear for a creditor’s exam.  Most subpoenas, issued to other parties, can be issued by the signature of an attorney for a party to the case, and then served.  Not so with a subpoena for a creditor’s exam.

It is not necessary that the subpoena compel Defendant’s appearance at the court house; he or she can be subpoenaed to appear at another location (Plaintiff’s counsel’s office, location of the creditor, etc.).  However, by doing so, in some cases you lose some of the “punch” of the remedy.  Much of the value of a subpoena for a creditor’s exam lies in the fact that most debtor’s do not want to be forced to “go to court.”

You may choose to serve a Disclosure Statement with the Subpoena to Appear, along with correspondence indicating that if the Disclosure Statement is completed and returned with requested documentation, you might release them from attendance at the creditor’s exam.

Judgment Lien

Notice of Judgment Lien

Judgment liens are relatively new creatures under Michigan law.  They are different than executions (Orders to Seize Property) levied against real estate.  They cannot be foreclosed, and therefore cannot be used to force the involuntary sale of real estate to satisfy a debt.  However, they are inexpensive, relatively simple, and can protect a creditor from the sale of real estate, and some instances, from the refinancing of an obligation against the property, without dealing with the debt owed to the creditor.

When Available: 21 days post-judgment (MCR 2.614(A)(1)).

Governing Law: Statute:   MCL 2805.

Fees: $10.00 filing fee to Court1

$17.00 recording fee (2 pages) to the Register of Deeds in the county of recording.

SCAO Form: Notice of Judgment Lien – MC94

http://www.courts.michigan.gov/SCAO/courtforms/generalcivil/mc94.pdf

Notes:

A Judgment Lien, once recorded, attaches to all legal interests in real estate held by the Defendant, and attaches to any subsequent interests acquired by the Defendant, in the county of recording, during the life of the Judgment Lien (5 years).

A Judgment Lien expires in 5 years (and expires if the underlying judgment expires), but may be renewed once.

A Judgment Lien does not attach to interests held as tenants by the entireties.

A Judgment Lien cannot be foreclosed.

Personal Property Seizure

Order to Seize Property

(formerly “Writ of Execution”)

An Order to Seize Property is the method to give a court officer authorization to seize personal (moveable) property belonging to Defendant, sell it, and (after deduction of the officer’s fees) apply the net proceeds of the sale to the debt.

When Available: 21 days post-judgment (MCR 2.614(A)(1)).

Governing Law: Statute:  MCL 600.6002

Michigan Court Rule 3.106

Fees: $15.00 filing fee to Court

Fees to Court Officer (MCL 600.2559(1)(j)):

$34.00 plus round trip mileage

Transportation costs to move seized property

Storage costs to safeguard the seized property

7 percent of the first $5,000 in receipts or total settlement amount

3 percent of any receipts or total settlement amount in excess of $5,000

SCAO Form: Request and Order to Seize Property – MC19

http://www.courts.michigan.gov/SCAO/courtforms/generalcivil/mc19.pdf

Notes

An Order to Seize Property must be served by an sheriff or deputy sheriff, or an officer deputized to do so.  MCR 2.103(B); someone who is merely a process server is not authorized to execute the Order (though some process servers are so deputized).

For substantial assets, be aware that another entity may have a lien against, or security interest in, the property.  You should notify the lien holder or secured party of your seizure of the asset, and determine if the asset has realistic value over and above the amount of the lien or secured interest, before you (through the court officer) sell the asset.

Liens Against Real Estate

(formerly “Writ of Execution”)

Levying a lien against real estate, once you have completed the process, can give you a way to force a sale of real estate, and apply part of the proceeds (if there are any) toward the debt owed to you.  These types of execution, however, take some time, and are relatively expensive as compared to other remedies.

When Available: Nominally, 21 days post-judgment (MCR 2.614(A)(1)), but a creditor must also attempt to collect against personal property before proceeding against real estate.

Governing Law: Statute:  MCL 600.6004

Michigan Court Rule 3.106

Fees: $15.00 Filing fee to Court

$          Fees to Sheriff/Court Officer

$          Title search costs

SCAO Form: Order to Seize Property – MC19

http://www.courts.michigan.gov/SCAO/courtforms/generalcivil/mc19.pdf

Recovering Collateral

Replevins/Repossessions

Claim & Delivery / Repossession

Claim & Delivery:

Claim & Delivery is a form of action in Michigan by which a party (usually a creditor or lessor) can recover possession of a specific piece of property (personal (moveable) property, not real estate) from the party (usually a debtor or borrower) who has control or possession of the property.  It is the modern Michigan equivalent of a “replevin,” the archaic cause of action to force someone to return property to you, along with a claim for damages, if appropriate.

When Available: When another party has wrongful possession of, or has refused to return, property (not real estate) belonging to you.  This form of action can be used for any moveable, separable piece of property, from a valuable collector coin, to industrial tooling equipment.

Governing Law: Statute:  MCL 600.2920

Michigan Court Rule 3.105

Fees: $65.00 Filing fee for Claim & Delivery action

$          Filing fee for Supplemental Complaint (to recover money damages):

$25.00 – If claim is up to $600.00

$45.00 – If claim is $600.01–$1,750.00

$65.00 – If claim is $1,750.01–$10,000.00

$150.00 – If claim is for more than $10,000.00

$20.00 Motion fee for Motion for Possession Pending Judgment

$          Fees to process server/court officer

SCAO Forms: Summons and Complaint – MC01

http://www.courts.michigan.gov/scao/courtforms/GeneralCivil/mc01.pdf

Complaint – Claim and Delivery – MC35

http://www.courts.michigan.gov/scao/courtforms/claimdelivery/mc35.pdf

Motion and Order for Possession Pending Judgment – Claim and Delivery – MC36

http://www.courts.michigan.gov/scao/courtforms/claimdelivery/mc36.pdf

Order of Possession Pending Judgment – Claim and Delivery – MC37

http://www.courts.michigan.gov/scao/courtforms/claimdelivery/mc37.pdf

Bond – Claim and Delivery – MC38

http://www.courts.michigan.gov/scao/courtforms/claimdelivery/mc38.pdf

Judgment – Claim and Delivery – MC39

http://www.courts.michigan.gov/scao/courtforms/claimdelivery/mc39.pdf

Note

If you have a basis to do so, you should usually file a Motion for Possession Pending Judgment with or very soon after you file the Summons and the Complaint.

Repossessions:

In general, under Michigan law, a creditor with a perfected security interest in collateral may use self-help repossession, upon the debtor’s default, to reclaim possession of the collateral, if the repossession can be accomplished without breaching the peace.

When Available: Upon default of the debtor’s obligation and, generally, notice to the debtor of that default.

Governing Law: Statute:  MCL 440.9601 et seq. (and following sections)

Fees: Fees paid to Process Server/Court Officer/Repossession Agent

Storage Fees

Costs incurred on resale

Related expenses

Notes

Repossession, as a form of self-help, can only be used if it can be accomplished without breaching the peace.  A repossession agent cannot force his way into a home or garage to get the collateral.

If the notice to the debtor is not sufficient, or does not provide all of the information required by the statutory provisions and/or the terms of the agreement or loan, the creditor may be barred from collecting a deficiency from the debtor if the proceeds from the sale of the collateral are insufficient to satisfy the debt under the agreement.
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