11 August 2022
/ Jeffrey K. Bearss
Collecting Non-Performing Judgments in Michigan: The Opportunities of Judgment Liens
In Michigan, judgment liens can be used as a method of collection on non-performing judgments. MCL §§600.2801 – 2819 provide that final judgments in a court of record may attach as judgment liens on any interest in real property (including after acquired property) of the judgment debtor located in the county in which the notice of judgment lien is recorded. To accomplish this, a judgment creditor may file a notice of judgment lien with the court that issued the judgment and record it in the land title records of the county register of deeds.
MCL §600.2805 sets forth the information that must be included in a notice of judgment lien which includes:
- Case caption and docket number,
- Current name and address of the judgment creditor and attorney,
- Name and last four digits of the social security number or tax identification number and last known address of the judgment debtor,
- This four-digit ‘‘identifier’’ ensures that the lien attaches only to property owned by the judgment debtor and not some unrelated party with a similar name. Also, using only the last four digits protects the privacy of the judgment debtor,
- Current balance due on the judgment,
- Date judgment entered, expiration date of the judgment and expiration date of the judgment lien, and
- Signature of the judgment creditor or attorney.
A copy of SCAO form MC94 can be found here.
This form provides for the certified original to be returned to the judgment creditor for recording with the register of deeds. The clerk also returns two signed copies, one for the judgment creditor’s records, one to be served on the judgment debtor, and retains one copy for the court records. The judgment creditor records the original with the register of deeds in the county where the debtor may own property. Once recorded, it is assigned a liber and page number and returned to the judgment creditor.
A judgment lien cannot be foreclosed. However, when real property is sold or refinanced, a title company searches the grantor/grantee index for liens. The title company confirms whether the owner is the judgment debtor by cross referencing the last four digits of the social security number or tax identification number. Once confirmed, the title company requests a payoff letter from the holder of the judgment lien and the judgment creditor issues a recordable discharge promptly upon payment.
MCL §600.2809 provides that judgment liens expire when the underlying judgment expires (or five years from the date of recording), unless it is re-recorded with the register of deeds. A judgment lien may be renewed only once and is accomplished by re-recording the judgment lien with the register of deeds not less than 120 days before the initial expiration date. Its priority will continue from the date of the attachment of the original judgment lien.
If you have any questions regarding this topic, please contact attorney Jeffrey Bearss. Jeff is an attorney who handles consumer collection matters located at Weltman’s Detroit, MI office.
This blog is not a solicitation for business and it is not intended to constitute legal advice on specific matters, create an attorney-client relationship or be legally binding in any way.
