States — A Closer Look at Small Claims
State rules for judgment collection
Michigan laws regarding small claims court can be found at MCL 600.8401—600.8427 and MCR 4.301—4.306. Michigan offers some easy to understand informational booklets and online sources which make the small claims process very simple to follow, and with all the forms that you will need.
Before Small Claims Court
Filing a lawsuit in small claims court should be the last resort. Try to talk to the person or business first and try to work out an arrangement that will be good for both of you. You can also write a demand letter outlining what you feel you are owed; why they owe you the money; ask them to pay or contact you with pay arrangements; and, give them a very firm deadline to do so. (See our Sample demand Letter (before the suit is filed)). Another option is to try mediation which is a process in which two or more people in a dispute meet in private confidential setting with a trained neutral person. Mediation is either free or offered at a very low cost. If there is no success in mediation, then, you can proceed to small claims court.
If you are headed for small claims court, the maximum you can collect is $3,000. All small claims cases are heard by a judge or magistrate in the small claims division of the district court where the dispute took place or where the defendant lives or the company does business. Your case will either be heard by a judge or a lawyer magistrate. You have no right to a jury trial, and you may not be represented in Michigan small claims cases. However, either party may request the case be heard in the general district court where you may be represented by an attorney. If you decide to move to the general court, the loser may be asked to pay for court costs and attorney fees.
Michigan statutes allow for any monetary claim not exceeding $3,000 to be filed in small claims court.
Filing Your Claim
You must file an affidavit and claim form with the clerk of district court if you want to file a small claims case. You can fill out the forms at the courthouse or online; print them out; and bring them to the clerk. Remember this is done in the county or city where the defendant or business lives or operates. At the time that the forms are filed, you will be required to pay the filing fees. At this time the fees are as follows:*
- Claims up to $600: $25
- Claims from $600 to $1,750: $45
- Claims from $1,750 to $3,000: $65
*These fees are subject to change at any time, so please check with the clerk in the county where you are filing your claim. You will want to ask about other fees as well, such as postage, and service fees.
Once all forms and fees are filed, the court will notify the other party of the claim and the date of the hearing. The defendant will then have the opportunity before the trial date.
The Defendant’s Response
The defendant has several choices. They can pay the claim in full. They can answer the claim before the hearing date or come to the hearing as to why they do not believe they owe the money. If the defendant wants to have an attorney, they can request that the case be transferred to regular district court.
They may choose to file a counterclaim arguing that the plaintiff owes you the money. This should be filed in the court and sent by first class mail to the plaintiff. The defendant(s) may also choose not to appear at the hearing, in which case they could lose by a default judgment.
Neither party may be represented by an attorney in small claims court.
If the case was heard by a judge, no appeal is permitted. If the case was heard by an attorney magistrate, either party may ask for an appeal before the judge. In this case, the case will be reheard and all evidence will be re-presented.
Statute of Limitations
The statute of limitations in Michigan small claims cases vary depending on the type of claim you are pursuing.
- Written contracts: 6 years
- Oral contracts: 6 years
- Personal injury: 3 years
- Property damage: 3 years
Collecting Your Judgment
If you are awarded a judgment, the debtor may pay at the hearing or the judge may set up a payment plan for the debtor. If they do not pay during that time, you can return to court and get permission for garnishment, or seizure of property.
In addition, if the claim was the result of an auto accident, you can ask the court for an abstract of judgment which suspends the debtor’s driver’s license until the judgment is paid.
Judgments last for anywhere from 5 to 20 years depending on the type of judgment it is and how long it can be renewed.
For a more complete list of methods to collect the judgement you are entitled to, see our General Methods for Collecting Your Judgment article in our collection of articles on judgment collection resources. The methods are generally the same in all states, though the procedures you need to follow may differ in different jurisdictions.
collecting your judgment
Article of the month
What You Should Know
Before You File a Claim
States—A Closer Look at Small Claims
This month’s focus: Michigan
- Demand Letter (before the suit is filed)
- Demand Letter (after the judgment is awarded)
Note: The first letter was originally published by one of our authors, Pat Schroeder, at http://www.thelawinsider.com/insider-tips/how-to-write-a-demand-letter/.
Collect Your Judgment Links
- ABA Guide to Solving Legal Disputes, Chapter 5, Small Claims
- ADR—Alternative Dispute Resolution: A Clients Guide to Language and Procedure, Chapter 5
- Small Claims Court Terms
Tip of the Week
September 27, 2010
If you have been awarded a judgment, waited the 30 days required, sent a demand letter giving the debtor a time limit for paying his/her debt; what should you do if you still have no money? You know that the court can do little, but before you take steps to garnish wages or bank accounts, consider suggesting negotiation or mediation if the debtor gives any impression that they want to settle the matter.