Collecting Money from a Judgment in Michigan

Attachment v. Execution of Realty:

If you have a judgment against someone, default or otherwise, a frequent question is what to do next. While you can always set up a creditor’s exam, or attempt to garnish the defendant’s paycheck or tax return, sometimes even these techniques come up with nothing. Once you have tried these tactics, you may want to explore attachment or execution of realty especially if the defendant has his or her money all wrapped up in real estate where it is inaccessible to the more common collection attempts.

Attachment is the process by which a judgment lien attaches to the Defendant’s interest in real property. This is accomplished by the creditor filing a notice of judgment in accordance with MCL 600.2803 with the register of deeds. This can even apply to after acquired property. There is no right to foreclose a judicial lien pursuant to MCL 600.2819.

Execution of realty is slightly different. One may only move for an execution after execution has been made against personal property pursuant to MCL 600.6004. Some property is exempt from levy and sale under execution pursuant to MCL 600.6023. This exempt property includes:

• a homestead exemption
• household goods under $1000.00 all apparel for the debtor and his family
• provisions and fuel for comfortable subsistence of each household member
• a seat, pew, or slip in the place of worship and cemetery plots
• per household member: 10 sheep, 2 cows, 5 swine, 100 hens, 5 roosters, and feed for six months
• occupational tools less than $1000.00

As you can see, this is a pretty unusual statute. If you are at your wits end trying to collect a judgment, or if you have had your property executed or attached, you need an experienced attorney to assist you and protect your rights. To retain Garmo & Kiste, PLC, for assistance in these matters call us at (248) 398-7100 for a free consultation or contact us with a private message. Need help Collecting Money from a Judgment in Michigan? We are experienced Michigan attorneys with offices in Troy, MI.

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Limits the rights of Debt Buyers in Collections Matters

Our office has worked extensively with the collectors and lawyers representing Asset Acceptance, LLC. This debt collection company was recently involved in a class action lawsuit. The Plaintiffs in the lawsuit were people like the people we often represent who had defaulted on a loan which had been sold to Asset Acceptance. In order to understand the opinion, it is critical to understand the definition of “charge-off” with respect to a debt. According to the opinion “At some point after Plaintiff’s default, the original creditor determined that these respective debts were uncollectable, and therefore decided to ‘charge-off’ the debt… Creditors charge-off debt in accordance with federal regulations that permit the creditor to remove the debt from their financial records. See Victoria J. Haneman, The Ethical Exploitation of the Unrepresented Consumer, 73 Mo. L. Rev 707, 713-14 (2008) … These accounts are treated as a loss wherein the creditor receives a tax deduction under the Internal Revenue Code[1]. Id. at 714. Asset purchased Plaintiff’s charged-off accounts for pennies on the dollar and began its own collection efforts.” At this time the Defendant Asset Acceptance began to charge interest on the notes which had already been charged-off by the original creditors.

The issue in this case is whether the original creditor can continue to charge interest on the debts once they are charged off. The Plaintiff’s argue that since Asset Acceptance, as assignees of the note, stand in the shoes of the original creditor with no greater rights. As such, interest could not be collected without violating the Fair Debt Collection Act. The court sided with the Plaintiffs holding that “Because [the original creditors] waived the interest, Asset could not retroactively impose interest for the period in which it did not own the accounts.” McDonald v. Asset Acceptance, LLC, United States District Court, E.D. Michigan, Southern Division. Aug 7 2013. Slip. Op.

So, what does this mean for you? The holding is relatively narrow as applied to most debtors. However, if you believe that interest was accrued between the time your note was charged off, and purchased by the collections company, you may be entitled to a reduction in total balance.