In a civil court case, after a judge or jury hands down a verdict -- or after a court-approved settlement -- a judgment is entered by the court. As part of a typical judgment, the court orders the payment of money from one person to another. But the person who owes the money (the debtor) doesn't always pay up. A judgment lien is one way to ensure that the person who won the judgment (the creditor) gets what he or she is owed. A judgment lien gives the creditor the right to be paid a certain amount of money from proceeds from the sale of the debtor's property.
So how do judgment liens work in Michigan? Read on to understand the rules. (For more background information on liens on property and judgments in general, check out Nolo's articles Collect Your Court Judgment with a Real Estate Lien and Can You Collect Your Judgment?)
In every state, a judgment lien can be attached to the debtor's real estate -- meaning a house, condo, land, or similar kind of property interest. And some states also allow judgment liens on the debtor's personal property -- things like jewelry, art, antiques, and other valuables.
In Michigan, a judgment lien can be attached to either real estate or personal property.
The judgment must first be satisfied from the debtor's personal property. If that is insufficient, then real estate may be attached. A copy of the attachment must be filed with the registrar of deeds in the Michigan county where the debtor's property is located.
A judgment lien in Michigan will remain attached to the debtor's property (even if the property changes hands) for five years.
Keep in mind: In Michigan, a creditor's ability to collect under a judgment lien will be affected by a number of factors -- including a fixed amount of value that won't be touchable if the property is the debtor's primary residence (called a homestead exemption), other liens that may be in place, and any foreclosure or bankruptcy proceedings. If things get complicated, you may want to talk with an experienced Michigan bankruptcy and debt attorney to help you sort out any lien issues.
If you want to go right to the source and look up Michigan laws on judgment liens -- maybe you're a party to a judgment, or you're just researching potential encumbrances on property -- the relevant statute(s) can be found at Mich. Comp. Laws Sections 600.2809, .4035, .6004, .6017, .6018. For tips on looking up Michigan state laws, check out Nolo's Laws and Legal Research section.