How to Settle a Small Claims Case in Michigan Before the Hearing

Most Small Claims Cases Settle — Here's How

The hearing is the backup plan, not the default. In Michigan small claims court, parties can resolve their dispute at any point before (or even during) the hearing through direct negotiation, mediation, or a consent judgment.

Settlement avoids the uncertainty of a ruling and often costs the defendant less than the full amount claimed. A filed dismissal or consent judgment remains part of the court record, though settlement can resolve the dispute without a decision on the merits. It also eliminates the risk of a default judgment if something prevents you from attending the hearing, once the case is formally resolved.

Direct Settlement and the Dismissal Requirement

The simplest settlement path: negotiate with the plaintiff, agree on an amount, and pay them. But there's a step people routinely skip that creates real problems.

Paying the plaintiff does not automatically cancel the hearing. If the court date passes without a formal dismissal on file, the plaintiff could theoretically still appear and pursue the case — or worse, you could receive a default judgment because nobody told the court the dispute was resolved.

After payment, get two things: a dated, written receipt specifying that payment satisfies the claim in full, and confirmation that the plaintiff has filed Form MC 09 (Voluntary Dismissal) with the court clerk. If the plaintiff does not file the dismissal, attend the hearing anyway and present your receipt to the judge; ask the court to dismiss the case.

Consent Judgments on Form DC 85

If the settlement involves terms beyond a simple one-time payment — installment payments over several months, for example, or mutual obligations like returning property — the parties can put the terms in a written, signed agreement and file it with the court on Form DC 85 (Judgment, Small Claims). The judge may enter it as a judgment or require a full hearing (MCL 600.8410(1)).

If the court enters the agreement as a judgment, it can be enforced using the methods available for that judgment, such as garnishment or execution. A signed agreement that is not entered as a judgment remains an agreement between the parties.

CDRP Mediation

Michigan funds a statewide network of Community Dispute Resolution Program (CDRP) centers that offer mediation services. Many district courts route small claims parties to CDRP mediation before or at the start of the hearing.

Mediation is voluntary unless the judge specifically orders it. A neutral mediator helps both sides talk through the dispute and find common ground. The mediator doesn't decide who's right — they facilitate negotiation.

Mediation communications are generally confidential under statute, with an exception for evidence otherwise discoverable that was not prepared specifically for mediation (MCL 691.1557). If you reach an agreement, put it in writing and have both parties sign; it functions as a contract, or as a judgment if the court enters it as one.

You can reach your local CDRP center by calling 1-800-873-7658 (1-800-8-RESOLVE).

Negotiating From the Defendant's Position

Being the defendant doesn't mean you have no leverage. Consider the plaintiff's situation: they paid filing fees ($30 to $70), waited for a hearing date, and may need to take time off work to appear. If you offer a reasonable settlement — even at a discount — many plaintiffs will take the guaranteed payment over the gamble of a hearing.

Negotiate in writing (email or text message) so there's a clear record. Be specific about terms: the amount, the payment date, and the requirement that the plaintiff file a dismissal. Avoid verbal agreements without documentation — they're nearly impossible to enforce if the plaintiff later claims no deal was reached.

If you're disputing part of the claim but acknowledge owing something, a partial settlement is common. "I don't owe $4,000, but I'll pay $1,500 to resolve this" is a legitimate starting point. The plaintiff can accept, counter, or proceed to the hearing for a judicial decision.

Timing Your Settlement Attempt

The best time to approach settlement is as soon as you've reviewed the papers and assessed the claim's merits. Early settlement saves both sides preparation time and gives the plaintiff confidence that the dispute is resolved. If negotiations are ongoing near the hearing date, request an adjournment using Form MC 309 — but don't assume ongoing talks postpone the hearing. Only a signed judicial order does that.

The Michigan Small Claims Response Guide includes a settlement evaluation worksheet that helps you calculate what you realistically owe, compare it to the cost of a hearing, and structure a written offer.

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