Congratulations! Your hard work and determination finally paid off. You won the case you filed in the Michigan small claims court and the magistrate (or "attorney-magistrate") entered a judgment in your favor. The defendant owes you money.
Just because you won doesn't necessarily mean you're going to get paid. If you're lucky, the defendant will pay you voluntarily. Unfortunately, this doesn't happen in every case. Often, the defendant tries to avoid paying you. You have some options when this happens, however, such as:
- Seizing the debtor's property
- Garnishing money that's owed to the defendant
- Having the defendant's driver's license suspended
Collecting on your judgment can be complicated, so you may want to ask your attorney for some help.
The Names have Changed
When the suit was filed in the small claims court, you were called the "plaintiff," the person who filed the suit, and the person you sued was called the "defendant." Now that the case is over and you've won, you're now known as the judgment creditor and the defendant is called the judgment debtor.
When the magistrate makes a decision in your case (called a "judgment"), it will state how much money the defendant owes you. If the defendant is at the trial and has the money, he can pay you immediately. If he doesn't have the money and you both agree, the magistrate can set up a payment schedule. If the defendant didn't show up at trial, the court will send him a copy of the judgment (called a "default judgment"), which orders him to pay you in full within 21 days or complete an Affidavit of Judgment Debtor. In this form, the defendant lists where he works and where his bank accounts are located.
If none of these options work, you can start the other collection processes, which include:
Seizing the Defendant's Property
Also know as "executing judgment," this is when you take (or "levy") some of the debtor's property or assets to pay what he owes. You need to know where the defendant's property or assets are located before you can begin the seizure. If the defendant filled out an Affidavit of Judgment Debtor, some of the information should be there.
In order to seize property, you need to file a Request and Order to Seize Property. It can't be filed until 21 days after the judgment was entered. Once the magistrate grants your request, it will be served on (delivered to) the defendant by a court-appointed officer or a deputy sheriff. There are fees for filing the Request and for having it served. The district court clerk where you filed the small claims suit can tell you the fees.
With the court order, the sheriff or court-appointed officer will seize the debtor's property in Michigan (the property you listed in the Request). It then will be sold and the proceeds given to you. Property that may be seized includes:
- Money in bank accounts
- Personal property, like jewelry or art
- Motor vehicles
- Real property
Exempt property or money that can't be seized includes the defendant-debtor's homestead real estate and money he receives from public assistance programs, such as worker's compensation, unemployment, and Social Security benefits.
The sheriff or court-appointed officer is entitled to collect a fee from the sale proceeds as payment for their efforts in seizing and selling the property. The court clerk can tell the amount of the fee, which is usually a percentage of the sale proceeds.
This is when you arrange for money that's owed to the defendant to be paid directly to you. In Michigan, there are three different types of garnishment, each with separate forms and filing fees (the court clerk can tell you the fees):
- A periodic writ of garnishment is used to garnish the defendant's wages, rent payments, or other payments that he get periodically. It's good for up to 91 days or until the judgment, interest, and your court costs are paid off, whichever happens first
- A non-periodic writ of garnishment is for garnishing the defendant's bank accounts or other money. Once money has been garnished, the writ is no longer valid. If you're still owed money, you have to get another writ
- With an income tax writ of garnishment you can collect the defendant's income tax refund. The Internal Revenue Service (IRS) won't send the defendant a refund for the current year, and the money will be paid to you. The writ expires after the IRS holds a refund, so if you're still owed money after one refund, you need to get another writ
Look carefully at these forms. They explain various types of payments or funds that can't be garnished, such as money in an Individual Retirement Account (IRA) and unemployment compensation. The defendant can also "object" or challenge your garnishment for various reasons, such as that the judgment has been paid or the defendant has filed for bankruptcy protection.
It's your responsibility to get information about where the defendant works and where his property and bank accounts are located. Without it you can't ask the court for an order of seizure or garnishment. If you don't know this information, you can file a Discovery Subpoena. If the magistrate grants it, the defendant will be ordered to appear in court and answer questions about his property and assets. You can't file a Subpoena until 21 days after the judgment was entered. And, it's a good idea include an Affidavit of Judgment Debtor for the defendant to fill-out.
There are fees for filing the Subpoena request and for having it served on the defendant. The court clerk can tell you about these fees.
If your small claims suit was over a car accident, you can ask the court for an abstract of judgment. This works to suspend the defendant's Michigan driver license until he pays the judgment. You have to wait 30 days after the judgment date before you can get an Abstract, and you need to have the defendant's full name, date of birth, and Michigan driver license number. The court clerk can give you the forms you need, and there's no filing fee.
Satisfaction of Judgment
Once the defendant has paid the judgment, you need to file a Certificate of Satisfied Judgment. It's your acknowledgment that the defendant's debt to you has been paid in full.
Questions For Your Attorney
- Can you help me collect on my small claims judgment? How much will charge to help me collect on a judgment?
- Not long after the small claims court entered a judgment in my favor, the defendant moved and now I can't find him. What can I do?
- Is anything I collect from the defendant taxable to me? Even the defendant's tax refund?