The 3 Step Process to Collecting Consumer Debts in Michigan
This article is designed to give you an overview about how you can go about collecting your unpaid debts in Michigan so you can turn your write-offs into large gains to your bottom line.
File a Lawsuit(A) Locate the debtor. Often the hardest part of the collection law suit is finding the debtor that you are trying to sue. Attorneys have a number of tools available to them to assist in this task and can utilize both paid and unpaid services to locate your debtor. As a general rule if you can't get a verified address for the debtor your lawsuit will not get very far. (B) File a summons and complaint. Prepare and file a summons and complaint. Most cases require specialized editing to the complaint to properly encompass all available claims and SCAO forms should not be used in all circumstances. (C) Serve the debtor. Michigan courts require that a defendant to a law suit be served in accordance with Michigan law. Service of process in these cases usually takes place in one of two ways: i. Personal service - your process server locates the debtor and physically hands the lawsuit to them; OR ii. Alternate service - the court has discretion to allow a Plaintiff to serve a debtor defendant by some method other than personal service. The courts do not grant these motions lightly and sufficient verification of the debtor defendant's evasion of service and his whereabouts are required.
Obtain a JudgmentOnce the collection lawsuit has been properly served the case proceeds on one of two tracks. Either the debtor files an answer or not: (A) If the debtor files an answer the court will usually set a pre-trial date where the parties can attempt to resolve the dispute or otherwise obtain a scheduling order for the progression of the dispute before the court. (B) If the debtor fails to file an answer in an appropriate time frame the creditor can obtain a default judgment. (i.) If the debtor was personally served he has 21 days from the date of service to respond, failure to respond by that time frame allows the creditor to simply file a default judgment with the clerk of the court; (ii.) If the debtor was served by mailing or by some alternate means he has 28 days in which to file an answer or otherwise defend, failure to respond allows the creditor to file a default judgment.
Collect Your MoneyIn most creditor collection cases obtaining a judgment against your debtor defendant is the easy part; it is collecting that judgment that is difficult. Michigan law affords a number of rights to a judgment creditor. An experienced attorney can use the full extent of Michigan collection law to assist you but some common ways to collect a judgment are: (A) Garnishment of periodic wages. (B) Garnishment of non-periodic payments. (C) Seizure of bank accounts. (D) Seizure of personal property. (E) There are also a number of other more aggressive and comprehensive collection methods available and only your attorney can properly advise you on how to utilize them.