The Process of a Debt Collection Lawsuit

Businesses of all kinds frequently provide goods and services on credit or other forms of advance. Whether you are a skilled trade working on someone’s private residence or commercial property, a financial institution extending loans, or just a small business who sells products on an open account, each of these businesses eventually face the same issue: clients or customers that fail to pay their debts.

This article is designed to give you an overview about how you can go about collecting your unpaid debts so you can turn your write-offs into large gains to your bottom line. There are three basic steps to a collection case.



1.    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.

2.    File a summons and complaint. Prepare and file a summons and complaint. Michigan provides State Court Administrator Office (SCAO) approved forms that can be used (—General.aspx).  Most cases require specialized editing to the complaint to properly encompass all available claims and these SCAO forms should not be used in all circumstances. To properly file a summons and complaint with the court you will need the following:

  •   A properly completed and signed summons and complaint;
  •   The appropriate filing fee; and
  •   Claims up to $600 – $35 filing fee;
    • $601 to $1,750 – $55 filing fee;
    • $1,751 to $10,000 – $75.00 filing fee; and
    • $10,000+ – $160.00 filing fee.
  •   A return envelope with postage prepaid.

3.    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:

  •   Personal service – your process server locates the debtor and physically hands the lawsuit to them; OR
  •   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.


II.    OBTAIN A JUDGMENT – Once the collection lawsuit has been properly served the case proceeds on one of two tracks. Either the debtor files an answer or not:

1.    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. If no resolution can be reached you can expect to be ordered to participate in the following:

  •   Discovery – the exchange of evidence supporting or contesting the claim;
  •   Alternative Dispute Resolution – the court ordered process of forcing parties to negotiate and come to a compromise;
  •   Motions – either party may file motions with the court asking for relief without the necessity of a trial; and
  •   Trial – before a judge or jury who decides the validity of the claim and any amounts owed.

2.    If the debtor fails to file an answer in an appropriate time frame the creditor can obtain a default judgment.

  •   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;
  •   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.


III.    COLLECT YOUR MONEY – In 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:

1.    Garnishment of periodic wages. Michigan law permits a judgment creditor to take up to 25% of a debtor’s take-home pay.

2.    Garnishment of non-periodic payments. If you have a debtor who receives a large commission or is due to be paid for a job they did, this type of garnishment would permit you to seize the entire payment.

3.    Seizure of bank accounts. Michigan deems a non-periodic garnishment to also include any funds or assets held for the debtor by a third party; this includes every cent sitting in a debtor’s bank account.

4.    Seizure of personal property. If your debtor owns personal property, such as vehicles, four wheelers, boats, televisions, etc., these assets can be seized by a duly authorized court officer and sold to satisfy the debt owed to you.

5.    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.


Our office has collected hundreds of thousands of dollars for our collection clients using these methods and we can assist your business as well. If you have unpaid debts stemming from loans, sale of goods on credit, sale of services on credit, tenants that left your rental property owing for rents and damages, or any other collection suit, we can help.

The best part about this type of legal service is that most cases are taken on a contingent basis, which means that we don’t get paid unless we collect money for you. Contact our office today for additional details.


One Response to “The Process of a Debt Collection Lawsuit”

Leave a Reply

  • (will not be published)