Collecting a judgment in Michigan
I am Mitchell Bisson, a Grand Rapids civil litigation lawyer. I have litigated for over 15 years. A judgment gives you the right to collect, but it does not put money in your hand. Collecting is a second round of work with its own tools and deadlines. This page covers collecting a money judgment in Michigan: interest, how long a judgment lasts, garnishment, property a creditor cannot take, questioning the debtor under oath, judgment liens on real estate, and transfers made to keep assets out of reach. I act for either side, the creditor who holds the judgment and the debtor facing collection. The short answers below come from my Michigan legal library.
Most judgment collection in Grand Rapids, Kentwood, Wyoming and the rest of Kent County starts the same way. The judgment is entered, the debtor does not pay, and the creditor has to choose a tool that fits this debtor. Wages call for one writ, a bank account for another, and real estate for a recorded lien. A debtor who is moving assets calls for something else again, and each tool has its own requirements.
This page is for both sides. I represent creditors who want a judgment paid, and I represent debtors whose wages, accounts or property are being targeted. Nothing here predicts how a collection effort will turn out, and I do not promise outcomes. A judgment says what is owed. It does not mean the debtor has income or property that the law lets a creditor reach, and I tell creditors that at the start.
Michigan judgment collection tools, deadlines and limits
These are the rules in the statutes and court rules. The numbers in your case depend on the judgment, the debtor and the documents.
| Tool or issue | What it requires | Time limit or key rule | Authority |
|---|---|---|---|
| Interest on the judgment | A money judgment recovered in a civil action; the rate depends on the filing date and on whether the judgment is on a written instrument with a stated rate | For complaints filed on or after Jan. 1, 1987: 1% plus the average 5-year Treasury note auction rate, recalculated every 6 months and compounded annually; a written instrument with a specified rate carries that rate, up to 13%, for complaints filed on or after July 1, 2002 | MCL 600.6013(7), (8) |
| Life of the judgment | A judgment of a court of record, and an action on the judgment | 10 years from rendition (6 years for a court not of record); a new judgment may be sought within the period | MCL 600.5809(3) |
| Writ of garnishment | A verified statement that the judgment is unsatisfied, the amounts due, and good reason to believe a named person holds the debtor’s property, owes the debtor or pays the debtor periodically | Serve the garnishee within 182 days after the writ issues; the garnishee discloses within 14 days; the debtor objects within 14 days after service on the debtor or after the latest balance statement | MCR 3.101(D)-(F), (H), (K); MCL 600.4011; MCL 600.4012 |
| Wage limit | Disposable earnings of the debtor | The lesser of 25% of weekly disposable earnings or the amount by which they exceed 30 times the federal minimum hourly wage; support orders and tax debts are treated differently | 15 USC 1673(a), (b) |
| Exempt property | Levy and sale under an execution | A statutory list with dollar caps, for example household goods up to $1,000 and trade tools or a vehicle up to $1,000, plus retirement accounts with conditions | MCL 600.6023(1) |
| Supplementary proceedings | A money judgment; an affidavit for an examination subpoena; a verified pleading to reach an equitable interest over $100 | May be maintained until the judgment is satisfied, vacated or barred; a restraint on a third party lasts 2 years from service unless extended | MCR 2.621; MCL 600.6101; MCL 600.6110; MCL 600.6119 |
| Judgment lien on real property | A notice of judgment lien, certified by the clerk and recorded with the register of deeds where the property is | Expires 5 years after recording; may be rerecorded once, not less than 120 days before expiration; does not attach to property held by the entirety unless the judgment is against both spouses | MCL 600.2803; MCL 600.2807(1); MCL 600.2809 |
| Voidable transfer | A transfer made with actual intent to hinder, delay or defraud, or without reasonably equivalent value in the situations the statute lists | Extinguished unless suit is brought within the time in MCL 600.5813 or 600.5855; an insider preference claim has 1 year | MCL 566.34; MCL 566.35; MCL 566.39 |
Interest. For most complaints filed on or after January 1, 1987, interest is calculated at 6-month intervals from the date the complaint was filed, on the entire judgment including attorney fees and other costs (MCL 600.6013(8)). A judgment on a written instrument with a specified rate follows that rate, capped at 13% (MCL 600.6013(7)). I confirm the rate for the filing date before anyone quotes a total.
The 10 years run from rendition. A creditor who wants to keep collecting past that date should bring the action for a new judgment inside the period, because the new judgment is subject to the same rule (MCL 600.5809(3)). For a debtor, an old judgment that was never renewed may be barred, but I check the dates the judgment was rendered and entered and look for a new judgment before I say so.
What a creditor has to have in hand
For garnishment, a verified statement. The clerk of the court that entered the judgment issues the writ if the plaintiff, or someone on the plaintiff’s behalf, files a verified statement that the judgment remains unsatisfied, gives the amount, accrued interest and costs, payments and balance due, and says the signer knows or has good reason to believe a named person controls the debtor’s property, owes the debtor or makes periodic payments to the debtor (MCR 3.101(D)). Garnishment of wages cannot start before the claim has been reduced to judgment (MCL 600.4011(5)).
Service on time. The creditor serves the writ, a copy for the debtor, the disclosure form and any fees on the garnishee within 182 days after the writ was issued (MCR 3.101(F)(1)). The writ states the last day it can be served to be valid (MCR 3.101(E)(2)), and the garnishee has 14 days to file a verified disclosure (MCR 3.101(H)). I calendar both dates when the writ issues.
A garnishment of wages stays until the balance is paid. A garnishment of periodic payments remains in effect until the judgment is satisfied (MCL 600.4012(1)). The creditor cannot get a second writ of periodic garnishment on a garnishee that owes the debtor periodic payments while a prior writ for the same judgment is in effect (MCR 3.101(B)(1)(b)), must send the garnishee and the debtor a balance statement at least once every 6 months after the first payment, and must provide a release within 21 days after the balance is paid in full (MCL 600.4012(5)). A late or missed balance statement does not affect the garnishment or the garnishee’s obligations under it (MCL 600.4012(5)(a)).
To question the debtor or someone who holds the debtor’s money, an affidavit. On an affidavit showing to the judge’s satisfaction that a person has money or property of the judgment debtor or is indebted to the debtor, the judge may issue a subpoena for that person or the debtor to appear, be examined under oath and produce records about the debtor’s property or income (MCL 600.6110(1)).
Defenses and answers I look at when a creditor comes after you
These are the questions I start with when a debtor brings me a writ, a lien notice or a subpoena. A creditor should read them too, because each one is a way a collection effort can stall.
The writ and its service. Objections to a garnishment are due within 14 days of the date of service of the writ on the debtor, or within 14 days of the date of the most recent balance statement the creditor sent the debtor under MCL 600.4012(5)(a). A late objection can be filed but does not suspend payment unless the court orders it, and objections cannot challenge the validity of the judgment (MCR 3.101(K)(1)). The grounds are limited and include exempt funds or property, pending bankruptcy, an installment order, the legal maximum already being withheld under a higher priority garnishment or order, payment of the judgment, a writ not properly issued, and an incorrect balance on a creditor’s statement (MCR 3.101(K)(2)). The hearing is set within 21 days after objections are filed (MCR 3.101(K)(3)). A writ that arrives in the mail is something to bring to me the same day.
How much can come out of a paycheck. For an ordinary judgment debt, federal law limits garnishment of weekly disposable earnings to the lesser of 25% of them or the amount by which they exceed 30 times the federal minimum hourly wage (15 USC 1673(a)). Support orders, orders in a Chapter 13 bankruptcy case and state or federal tax debts are treated differently (15 USC 1673(b)), and support income withholding orders take priority over a garnishment (MCL 600.4012(2)).
Exempt property and exempt money. MCL 600.6023(1) exempts from levy and sale under an execution wearing apparel, and provisions and fuel for 6 months; household goods up to $1,000 in value; tools or a vehicle needed for the debtor’s trade or business up to $1,000; disability insurance payments; individual retirement accounts; and qualified ERISA plans, with conditions. The homestead exemption is stated at $3,500 in value. Those exemptions govern execution. Garnishment of a bank account draws on other law, such as the court rule that bars a bank from withholding exempt funds from an account into which only clearly identifiable Social Security, Supplemental Security Income, Railroad Retirement, Black Lung or Veterans Assistance benefits are directly deposited (MCR 3.101(I)(6)). I treat the statute’s dollar figures as a starting point and confirm the current rules before I tell anyone property is safe or reachable.
Property held by a married couple. A judgment lien does not attach to real property owned as tenants by the entirety unless the judgment is entered against both the husband and wife (MCL 600.2807(1)). In Estes v. Titus, 481 Mich. 573, 579 (2008), the Michigan Supreme Court said the definition of asset exempts some entireties property, so marital property held by the entirety is exempt from the creditor of only one spouse when it is transferred under a divorce judgment.
The wrong person. A person with the same or a similar name as the debtor may demand that a creditor who recorded a lien deliver a recordable discharge as to that person’s property. The creditor has 14 days to comply and is presumed liable for at least $300 if it improperly fails to (MCL 600.2815).
An installment order. A judge may order that a judgment be paid in installments in amounts the defendant is able to pay (MCL 600.6201). That order suspends a garnishment of periodic payments for work and labor from the time it is served on the garnishee, but not a garnishment of nonperiodic payments or of an income tax refund (MCR 3.101(N)(1)). A creditor can ask the court to order installments from the debtor’s income under MCL 600.6107(1).
An appeal. An appeal does not by itself stay a judgment, and an execution may not issue until the time for an appeal of right has expired unless a rule, statute or order provides otherwise. The party seeking to stay a money judgment can file a bond that complies with MCR 3.604 for not less than 110% of the judgment, or ask the trial court for a stay with or without bond (MCR 7.209(A)(1), (E)(1)-(2)).
What each tool can reach
Garnishment reaches what the garnishee holds or owes when the writ is served on the garnishee. That means the debtor’s property in the garnishee’s possession or control and debts the garnishee owes the debtor on that day, and, through a periodic garnishment, the unprotected part of earnings, up to the amount in the verified statement (MCR 3.101(G)(1)-(2)). An employer may not discipline or discharge an employee because garnishment actions were brought, and one that does must reinstate the employee and reimburse lost compensation (MCL 600.4015).
Execution reaches nonexempt property through an officer. An execution may be issued to the sheriff, bailiff or other proper officer of any county (MCL 600.6001). Execution against real estate comes only after execution against the debtor’s personal property in the county proves insufficient (MCL 600.6004).
A judgment lien reaches real estate once it is recorded. The lien attaches to the debtor’s interest in real property when a notice of judgment lien, certified by the clerk of the court that entered the judgment, is recorded with the register of deeds for the county where the property is, or for later-acquired property when the debtor acquires it (MCL 600.2803; MCL 600.2805(1)). The notice is served on the debtor by certified mail, or personally if the judgment is $25,000 or more (MCL 600.2805). On a sale or refinance, the creditor is paid only from the debtor’s equity after senior liens, taxes and closing costs (MCL 600.2807(3)). The lien expires 5 years after recording, or sooner if the judgment expires first. It can be rerecorded once, not less than 120 days before the first expiration, and the debtor’s bankruptcy filing does not toll the time (MCL 600.2809). The creditor must record a discharge within 28 days after the judgment is paid in full (MCL 600.2811).
Questioning the debtor and reaching assets
A creditor with a money judgment may proceed by motion in the same action or by a separate civil action for relief formerly available through a creditor’s bill, relief under MCL 600.6101 to 600.6143, and other relief in aid of execution, and may use discovery under the court rules (MCR 2.621(A)-(B)). After judgment the judge may compel discovery of the debtor’s property, prevent transfers, order the judgment satisfied from nonexempt property and appoint a receiver, with no need to show first that an execution came back unsatisfied (MCL 600.6104). To reach an equitable interest, the motion or complaint must be verified, state the amount due over and above setoffs, and show equitable interests exceeding $100 in value (MCR 2.621(B)(1)).
Restraint. An order for examination may restrain the debtor from transferring nonexempt property for 2 years unless extended for good cause (MCL 600.6116). A third party who holds the debtor’s property or owes the debtor money and is subpoenaed is forbidden to transfer the property or pay the money, though it need not withhold money beyond double the amount the creditor claims, and a violation can bring contempt and liability for damages (MCL 600.6119). The subpoena must state the amount claimed and carry the court’s endorsement (MCR 2.621(C)).
Voidable transfers. Under MCL 566.34(1), a transfer is voidable as to a creditor, whether the claim arose before or after the transfer, if the debtor acted with actual intent to hinder, delay or defraud any creditor, or did not receive reasonably equivalent value in the situations the statute describes. In deciding intent, a court may consider whether the transfer was to an insider, whether the debtor kept possession or control, whether it was concealed, whether the debtor had been sued or threatened with suit, whether it covered substantially all assets, and whether the debtor became insolvent (MCL 566.34(2)). The creditor generally must prove it by a preponderance of the evidence (MCL 566.34(3)). A creditor whose claim arose before the transfer can also reach one made without reasonably equivalent value while the debtor was insolvent, or became insolvent because of it (MCL 566.35(1)).
The court can do more than undo the transfer. A creditor may obtain avoidance to the extent needed to satisfy the claim, an attachment, an injunction, a receiver or other appropriate relief, and a creditor with a judgment may, if the court so orders, levy execution on the asset transferred (MCL 566.37). The claim is extinguished unless brought within the time in MCL 600.5813, which is 6 years after the claim accrues, or MCL 600.5855, which gives 2 years after discovery of a fraudulently concealed claim, and an insider preference claim has 1 year (MCL 566.39). I do not wait for the judgment to start looking at transfers I can already see. Deeds, bank records, vehicle titles and new business filings tell the story. Estes, 481 Mich. 573, 579 (2008), held that property transferred under a property settlement agreement incorporated in a divorce judgment is subject to an action under the act, then called the uniform fraudulent transfer act, if it meets the definition of an asset.
How I handle a judgment collection matter
- Read the judgment and fix the dates. I start with the dates the judgment was rendered and entered, the court, the parties and whether the judgment is on a written instrument with a stated rate. Then I calendar the 10 year date, or the 6 year date for a court not of record, and the filing date that starts interest.
- Work out the number. A garnishment statement must show the judgment, interest, costs, payments and balance. I build it from the court file and the payment history.
- Find out what the debtor has. I look at the employer, banks, real estate, vehicles and any business, and where the records are thin I use an examination subpoena or discovery.
- Choose the tool that fits. A wage writ, a bank writ, a lien, an execution and a voidable transfer claim cost different amounts and reach different assets, and we decide together which is worth the cost.
- Serve and track. I calendar the 182 days to serve the garnishee, the 14 day dates, the 6 month balance statements, and the release or discharge when the judgment is paid.
- For a debtor, check the paper first. I check the writ, the amount, the exemptions, how service was made and whether the judgment is still enforceable, and I file objections within the 14 days when there are grounds.
- Protect the dates. Before 10 years run on a judgment worth collecting, we decide whether to bring the action for a new judgment.
Ways a collection matter may end without more litigation
Whether any of these is available depends on the debtor, the creditor and the documents. None is automatic.
Payment in full. A release of garnishment is due within 21 days and a discharge of a recorded lien within 28 days after payment in full.
A payment plan. A written agreement or a court-ordered installment plan should say what happens on a missed payment and whether a lien stays in place.
A negotiated payoff. The settlement paper should say what is released, who pays what and when, and which discharge documents will be recorded.
Bankruptcy. Bankruptcy is its own area of law, and I tell clients plainly when it changes what can be collected. Pending bankruptcy is a ground for objecting to a garnishment (MCR 3.101(K)(2)), and a recorded copy of the debtor’s bankruptcy discharge with the schedule listing the judgment debt extinguishes a judgment lien unless a recorded order in the bankruptcy case finds the debt nondischargeable (MCL 600.2809(6)).
What I need from you
If you are the creditor, bring the judgment, the case number, the dates it was rendered and entered, a record of every payment, any note or contract with a stated interest rate, and everything you know about the debtor: other names, addresses, employer, banks, real estate, vehicles and businesses. If you are the debtor, bring the writ, lien notice or subpoena and note the date and manner of service, because the deadlines run from service. Bring your last pay stubs, benefit letters, bank statements that show where deposits come from, and any deed or payment agreement. Do not transfer, hide or give away property once a lawsuit or judgment exists. Do not ignore a writ, do not sign a payment agreement until it has been read, and talk to the other side about assets only after you have spoken with me.
Where your Kent County collection matter will be heard
I represent clients in Grand Rapids, Kentwood, Grandville, Wyoming and across Kent County. Under MCL 600.8301(1), the district court has exclusive jurisdiction in civil actions when the amount in controversy does not exceed $25,000. Michigan law sets the Kent County district courts by municipality. The 61st District Court serves the city of Grand Rapids, the 59th serves the cities of Grandville and Walker, the 62A serves the city of Wyoming and the 62B serves the city of Kentwood. MCL 600.8128a; MCL 600.8130(1)-(3). The 63rd District Court serves the rest of Kent County outside those five cities. MCL 600.8130(4). Circuit courts have original jurisdiction over civil claims that are not assigned exclusively to another court by the constitution or statute, and for Kent County the circuit court is the 17th Judicial Circuit. MCL 600.605; MCL 600.518. Collection starts in the court that entered the judgment, where the clerk issues the writ of garnishment (MCR 3.101(D)).
Why people hire me for a Michigan judgment collection matter
You work directly with me, the lawyer handling your case. I give you the strengths and weaknesses of the case straight, including what it could cost you and what it could recover. I build the case the facts support, and then we decide together how to proceed.
Fees depend on the type of case, its complexity and whether it is likely to go to trial. I explain my fee arrangement at the consultation, before you decide whether to hire me.
Questions I hear from people trying to collect a judgment in Michigan
How much interest accrues on a Michigan money judgment?
For complaints filed on or after January 1, 1987, interest runs from the filing date at 1% plus the average 5-year Treasury note auction rate for the six months before each July 1 and January 1, compounded annually. If the complaint was filed on or after July 1, 2002 and the judgment is on a written instrument evidencing indebtedness with a specified rate, that rate applies, up to 13% compounded annually. Interest is calculated on the whole judgment, including costs and attorney fees.
How does a creditor garnish wages or a bank account after getting a Michigan judgment?
After a judgment, the creditor files a verified request and the clerk of the court that entered it issues a writ of garnishment under MCR 3.101. The writ must be served on the garnishee, such as an employer or bank, within 182 days after issuance. The garnishee must file a verified disclosure within 14 days after service and must deliver a copy of the writ to the debtor within 7 days.
How much of my paycheck can be garnished for a judgment debt?
For an ordinary judgment debt, federal law limits the amount garnished from your weekly disposable earnings to the lesser of 25% of them or the amount by which they exceed 30 times the federal minimum hourly wage, under 15 USC 1673(a). Michigan’s garnishment rule refers to that federal limit. Support orders, bankruptcy orders, and some tax debts are treated differently.
What property can a creditor not take to collect a Michigan judgment?
MCL 600.6023(1) lists property of a judgment debtor and the debtor’s dependents that is exempt from levy and sale under an execution. Examples include family pictures, wearing apparel, and provisions and fuel for 6 months; household goods up to $1,000 in value; tools or a vehicle needed for the debtor’s trade up to $1,000; disability insurance benefits; individual retirement accounts; and qualified ERISA retirement plans, with limits.
How long is a Michigan money judgment good for, and can it be renewed?
A judgment of a court of record can be enforced by an action on the judgment brought within 10 years of its entry, and within that period an action may be brought upon the judgment for a new judgment, under MCL 600.5809(3). The new judgment is subject to the same rule. A judgment of a court not of record, including a small claims judgment, has a 6-year period.
How does a judgment creditor find and reach a debtor’s assets in Michigan?
Under MCR 2.621, a creditor who obtains a money judgment may, by motion in the same action or a separate civil action, seek relief supplementary to judgment under MCL 600.6101 to 600.6143 and use discovery under the court rules. A subpoena to enjoin the transfer of assets under MCL 600.6119 must specify the amount claimed, and the court must endorse its approval of the subpoena.
What can I do in Michigan if someone is moving their assets so I cannot collect?
Michigan’s voidable transactions statute (the former fraudulent transfer act) lets a creditor ask a court to treat certain transfers as voidable. A transfer qualifies if the debtor made it with actual intent to hinder, delay or defraud a creditor, or without receiving reasonably equivalent value in the circumstances the statute lists. Courts may consider whether the transfer went to an insider, whether the debtor kept control, and whether the debtor had been sued or became insolvent. The creditor generally has the burden by a preponderance of the evidence. The deadline points back to MCL 600.5813 and 600.5855, so do not wait for a judgment to look into it if you can already see the transfers happening.
Related Michigan pages
- Grand Rapids Civil Litigation Attorney
- Contract damages and remedies
- Attorney fees and costs in civil cases
- Grand Rapids Lawyer for Defending a Lawsuit
- Debt collection defense
- Appeal stays, bonds and costs
I handle judgment collection and the defense of collection efforts in Michigan for either side. Contact me 24/7 by phone or email. Your Rights, My Fight! Call for a free initial consultation.
Big-Firm Power. Street-Level Grit.
Law Offices of Mitchell S. Bisson, 2828 Kraft Ave SE, Suite 295, Grand Rapids, MI 49512, serving Kent County and West Michigan.
This page provides general information about Michigan law and is not legal advice. Reading it does not create an attorney-client relationship. Laws change and every case turns on its own facts. Consult a licensed attorney about your specific situation.