Collecting on Money Judgments

When a plaintiff files a lawsuit, he may think he will be awarded a sum of money if he is successful; however, this not exactly the case. The successful plaintiff is not awarded money, rather, he receives a money judgment. It is his job (or his attorney’s job) to set out and collect on this judgment. How does he go about collecting on the judgment? Below is a brief outline of how a successful plaintiff can collect on a money judgment.

· Execution, which is the process of acting on the court’s judgment, may not take place until at least 21 days after the judgment has been entered (this time may be extended if certain motions are filed). MCR 2.614.

· Plaintiff must seek writ of execution on the defendant’s (or “judgment debtor”) personal property. MCL 600.6004 and 6017. A writ of execution is an order telling the sheriff to seize and sell the defendant’s property. The proceeds of the sale will be used to satisfy the judgment. The writ of execution is valid for 90 days after the sheriff receives it; however, if it expires it may be reissued by the court. MCL 600.6002 and 6005. Several writs may be issued, simultaneously, to officers in different counties, district court districts, or municipalities to be enforced by them there. MCL 600.6005.

· After the writ is issued, the plaintiff’s counsel will direct the court officer to go to the property where the writ is to be levied. The court officer will then go to the property, attempt to satisfy the writ by collecting property sufficient to satisfy the execution. MCL 600.6025. Certain property is exempt from execution (e.g. family photos, household goods, clothes, etc.). MCL 600.6023. If any of the property is subject to a security interest, the lienholder will be notified, and the property will be sold subject to the lien. MCL 600.6017(3).

· After providing 10 days’ public notice, the property may be sold at an execution sale. MCL 600.6031. The court officer must attempt to get the best price for the property at the sale. MCL 600.6032. The proceeds of the sale will first go to pay the expenses incurred due to the sale and then be used to satisfy the judgment. Any surplus, beyond what was needed to satisfy the judgment and the sale expenses, will be returned to the defendant. MCL 600.6044.

· If the defendant’s personal property is not sufficient to cover the amount of the money judgment, the writ may be levied on the defendant’s real property. MCL 600.6004. At this point, the plaintiff’s counsel should obtain another writ of execution against defendant’s real property.

· Next, Plaintiff should inform the court officer that the writ of execution is to be levied on the defendant’s real property and a proposed notice of levy, which will be filed by the court officer at the register of deeds.

· Plaintiff should then get the property appraised.

· Plaintiff should then begin giving notice of the auction. Notice of the sale must be published in the newspaper once a week for at least six weeks prior to the sale. Notice must also be posted in three places in the county for at least six weeks prior to the sale. The notices must provide a description of the property. MCL. 600.6052.

· The court officer will provide the purchaser with a certificate of purchase. The court officer will also record a certificate of sale with the register of deeds. MCL 600.6055. The defendant has one year from this time to redeem the property. MCL 600.6062.

Collecting on judgment is not always included in the scope of the litigation representation. Clients should consult their fee agreements to see if it is included. Some litigation attorneys do not handle judgment collections and the client may need to find a different attorney to handle the matter.

Categories: General