Judgment Liens on Property in Michigan

You went to court and got a judgment that says you're entitled to money from the party you sued, now called a "judgment debtor." What comes next? How can you—the judgment creditor—collect the money you're due? That's the focus of this article.

One way to collect is by putting judgment liens on the judgment debtor's Michigan property. After a quick review of how judgment liens differ from judgments, we'll turn our attention to the specifics of Michigan law. In particular, we cover:

• the kinds of property subject to Michigan judgment liens
• how you put judgment liens on Michigan property
• how long your judgment lien lasts, and
• the ways you can turn your judgment lien into money.

If you want some background information, here's more about how court judgments are collected.

What's the Difference Between a Judgment and a Judgment Lien?

A judgment is a court order that says a judgment creditor is legally entitled to a sum of money from a judgment debtor. But a judgment, standing alone, isn't self-enforcing. That is, you can't take a judgment to your county sheriff's office and demand that the judgment debtor's real estate be sold to pay you.

If you want to collect from the judgment debtor's real estate, you first have to attach your judgment to specific items of property. That's what a judgment lien does. In Michigan, when you properly record a notice of judgment lien, a lien attaches to the judgment debtor's property. At that point, you can look for ways to turn your judgment into cold, hard cash.

Kinds of Property Subject to Michigan Judgment Liens

In Michigan, you can attach judgment liens only to real estate, meaning land, buildings, and other improvements. A properly recorded notice of judgment lien (see below) attaches a lien to real estate the judgment debtor:

• presently owns, and
• acquires later, as long as your judgment lien is still good.

No Liens on Personal Property

You can't put judgment liens on Michigan personal property—cars, artwork, antiques, electronics, household furnishings, and the like. But that doesn't mean a judgment debtor always gets to keep their autos, boats, and other big ticket items. Even without judgment liens, there's a way to have the sheriff seize personal property.

If you're considering this step, speak to a Michigan collection lawyer first. They can tell you whether it's worth your time and expense to go after the judgment debtor's personal property—and there's a good chance it won't be. If it's likely to be worthwhile, they'll guide you through the process.

Michigan Property Exemptions

Like all states, Michigan exempts some property—both real and personal—from the reach of creditors. Dollar amounts mentioned here represent the maximum exempt value of the debtor's equity in the property, which might not be the same as the property's market value.

Here are a few examples:

• a homestead, consisting of up to 40 acres plus a dwelling (if outside a town or city) or one lot plus a dwelling (if inside a town or city), worth as much as $3,500
• up to $1,000 worth of books, equipment, tools, and similar property used in the judgment debtor's primary occupation, profession, or trade
• all wearing apparel and family pictures, and enough fuel and provisions to last for six months
• pension and retirement plans and individual retirement accounts, and
• household goods, furniture, books, appliances, and utensils, with an aggregate value of up to $1,000.

How to Attach Judgment Liens to Real Estate

Follow these steps to attach a judgment lien to the judgment debtor's real estate in each county where they own (or might in the future own) real estate.

Prepare Notice of Judgment Lien

Start by preparing a written notice of judgment lien. You can use the Notice of Judgment Lien form (SCAO Form MC 94), or you can prepare your own notice. The notice must be signed by you or your attorney and must include:

• the case caption and docket number
• your current name and address and (if applicable) the current name and address of your attorney
• the name and last known address of the judgment debtor, and the last four digits of their social security or tax identification number
• the current amount due on the judgment, and
• the date judgment was entered, along with the expiration dates of the judgment and the judgment lien.

File With the Court

Next, file the original and three copies of the notice of judgment lien, together with a self-addressed, stamped envelope, with the court that entered your judgment. The clerk of the court will certify the notice. After it's been certified, the clerk will return the original and two copies to you (one for your records, one for the judgment debtor).

Use one of the copies returned to you to serve the judgment debtor. When the judgment is for $25,000 or more, personal service is required. Otherwise, you can serve the judgment debtor by certified mail. In either case, you must file proof of service with the court.

Send Original to Register of Deeds

Finally, send the original, certified notice of judgment lien to the register of deeds for each county where you want a lien. A lien attaches to the judgment debtor's real estate in that county when the notice is recorded.

When Does a Michigan Judgment Lien Expire?

In Michigan, a judgment lien expires on the earlier of:

• five years from the date the notice of judgement lien was recorded by the register of deeds, or
• the date the judgment expires.

You can extend a judgment lien once, for another five-year term, by re-recording it. You re-record a lien by filing a second certified notice of judgment lien with the county register of deeds. Follow the procedure described above for recording an original judgment lien.

How Long Does a Michigan Judgment Last?

Most Michigan judgments are good for 10 years from the date of entry. Once your judgment expires, it's legally dead. Barring exceptional circumstances, you can't take any steps to enforce it—meaning you've lost the right to collect the money you're due.

You're allowed to renew a Michigan judgment, but you must act before the 10-year judgment term expires. To do that, file—in the court where your judgment was originally entered—an Ex Parte Motion and Order to Renew Civil Judgment (SCAO Form MC 390).

The court can grant or deny your motion, or it might decide to hold a hearing. Contact the court clerk's office ahead of time to find out about the court's procedure and how long it's likely to take. Be sure to give yourself plenty of time, because once your judgment expires, it's too late.

Record New Judgment Liens

Renewing your judgment doesn't automatically extend your judgment liens. If you still want those liens—and you do, if you haven't collected what you're owed—you must record new notices of judgment lien. The process is much the same as the process for attaching a lien in the first place.

Using the procedure described above for attaching an original judgment lien, get a certified notice of judgment lien from the clerk of the court, one for each county where you want a lien. Record the original certified notice in each county. Once you do that, have a judgment lien.

How Do You Turn a Michigan Judgment Lien Into Money?

In general, there are two ways you can try to collect on a Michigan judgment lien:

• negotiate a settlement, and
• wait for the judgment debtor to sell or refinance the property.

Negotiate a Settlement

If you want payment sooner rather than later, this is likely your best choice. No, you won't get all the money you're entitled to, but that's the nature of a settlement. You'll collect faster—and more inexpensively—than via the other two options.

Wait for the Judgment Debtor to Sell or Refinance

You can't foreclose on a Michigan judgment lien. But Michigan law gives you an alternative. Specifically, if the judgment debtor sells or refinances the property, you're entitled to the proceeds of the sale or refinancing in an amount equal to the judgment debtor's equity in the property after payment of:

• any superior liens
• outstanding property taxes, and
• costs and expenses of the sale or refinancing.

Next Steps

We've covered Michigan judgment lien basics, but of course, the devil's in the details. Now that you're familiar with Michigan law, you might decide that your best option is to get help collecting your judgment. An experienced Michigan creditor's rights or collection attorney can answer your questions and help you chart a collection path that gives you the best chance to maximize your recovery.