Collecting on a Judgment – General Information

After fighting the battle to win the lawsuit, a new battle to collect the monetary award must be commenced. The commencement of this subsequent battle must await the appeal period (MCR 2.614(A)(1), 7.101(H)(1)(a)) and/or 21 days after resolution of any motion for a new trial, for rehearing or reconsideration, or for other relief from judgment (MCR 2.614(A)(1)). Manipulating these rules allows debtors the opportunity to delay collection. There is also a stigma with some judges who view collections with negativity and may not enforce the rules that permit creditors to collect.A creditor may garnish income and may file a notice of judgment lien with the register of deeds in the county where the judgment debtor’s real property is located (MCL 600.2803). Statutory interest may be collected (MCL 600.6013). Consideration must be given in tort actions to the percentage of fault of any party and nonparty (MCL 600.6304). The judgment also has a limited life (MCL 600.5809). Unless a judgment is “renewed”, if it is from Michigan it lasts 10 years and if from another state, then 6 years.

The subpoena power can be used to subpoena the judgment debtor, anyone indebted to him, or anyone who has money or property of the debtor. A creditor’s examination may be used to question the individual under oath and force the production of records that could have information regarding the debtor’s assets (MCL 600.6110; MCR 2.621(A)). If it is discovered that money or property may be transferred or otherwise disposed of, then an order to prevent or enjoin that action may be procured (MCL 600.6119; MCR 2.621(C)). Also, questioning regrading transfers that were previously made with the debtor was insolvent because those may be considered fraudulent conveyances and a creditor may be allowed to collect on those.

A bank account is the easiest source from which to collect on a judgment, subject to any setoff the bank may be claim. Money owed to the debtor or his accounts receivable are also a source. Once the creditor’s examination has taken place, any discovery request must be acted upon immediately to prevent the debtor from hiding the asset discovered. Fill out a garnishment form, have the clerk issue it, and serve it on the bank before there is any chance to move the account funds around. A more detailed of garnishment may be found under a separate article.

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