Can a consent order be used to skip the court hearing and distribute the sale money by agreement?

Short answer: In Michigan, parties can ask a judge to enter a consent order that approves an agreed distribution of sale proceeds without a contested hearing, but the court must still have jurisdiction, all required parties and statutory claimants must be bound or given proper notice, and certain statutes or court rules may require a hearing or specific procedures before distribution. A judge may refuse to enter a consent order if it would violate law or prejudice non-consenting claimants.

Detailed answer — how this works in Michigan

This FAQ explains the typical steps, limits, and risks when parties try to use a consent order to avoid a court hearing and distribute sale proceeds by agreement. The guidance below assumes a generic situation in which real property or other assets were sold (for example, a foreclosure sale, partition sale, or sheriff’s sale) and multiple claimants (mortgagees, lienholders, judgment creditors, or the owner) are entitled to portions of the sale funds.

What is a consent order?

A consent order is a written agreement signed by the parties (or their lawyers) and entered by the judge as a court order. It records the parties’ settlement and becomes an enforceable judgment or order if the judge signs it. Michigan court rules allow parties to submit agreed orders and judgments for the court’s signature. See Michigan Court Rules (MCR) governing judgments and orders for procedural details; consult the Michigan Courts rules page: courts.michigan.gov (MCR).

When a consent order can substitute for a hearing

If every party with a legal interest in the proceeds signs the consent agreement (or the court finds that notice and opportunity to be heard were provided), the judge can often enter an agreed order disposing of the funds without conducting a contested hearing.
If the matter is purely procedural and statutory notice/hearing requirements are met (for example, creditors have been properly served or the redemption period has run), courts commonly accept a jointly submitted proposed order to direct disbursement.

When a hearing may still be required

Statutory protections: Some statutes impose mandatory procedures before money can be distributed (for example, certain foreclosure, probate, or tax-sale statutes). Those statutes can require notice, waiting periods, or a court confirmation hearing. You cannot use a consent order to override statutory requirements. For foreclosure-related statutes in Michigan, see the Michigan Compiled Laws (e.g., chapter on foreclosure actions generally) at the Michigan Legislature site: legislature.mi.gov. (Search for MCL sections applicable to your case such as foreclosure or surplus-distribution provisions.)
Unknown or unserved claimants: If a potential claimant (a junior lienor, a prior owner, an heir, or a creditor) has not been given proper notice, the court may decline to approve an agreed distribution until the party is joined or notified and given a chance to object.
Public interest or government claims: Government liens (taxes, municipal claims) often require specific notice or statutory clearance before funds can be distributed.
Judicial caution: Even where the parties agree, a judge will not enter a proposed consent order that appears unconscionable, unlawful, or likely to prejudice third parties. The judge’s independent duty to ensure legality and fairness can trigger a hearing.

Practical steps to attempt distribution by consent order

Identify every claimant with a legal interest in the sale proceeds (mortgages, liens, judgment creditors, tax authorities, owners, heirs). Missing a claimant usually dooms an attempt to skip a hearing.
Obtain written waivers or signatures from all known claimants agreeing to the proposed distribution. If a claimant is represented by counsel, get counsel’s signature on the stipulation.
Prepare a proposed consent order that: (a) recites the facts; (b) sets out the agreed distribution formula and amounts; (c) states that all necessary parties have been served or have signed; (d) includes releases and representations about taxes or other encumbrances; and (e) requests entry without a hearing or expressly waives a hearing.
File the stipulation and proposed order with the court, attach proof of service or signed waivers, and ask the clerk to present it to the judge. Cite the applicable court rule(s) for entry of agreed orders (see the Michigan Court Rules page: courts.michigan.gov).
If the court signs the agreed order, follow its directions for disbursement (pay to the sheriff, receiver, escrow agent, or clerk as directed). If the court refuses, be prepared to schedule a short hearing to justify the distribution and to provide further evidence or notice to missing claimants.

Key limits and cautionary points

Consent cannot cure lack of jurisdiction. If the court does not have subject-matter or personal jurisdiction over a claimant, an order distributing funds could be void as to that claimant.
A consent order cannot extinguish unwaivable statutory rights (for example, certain consumer protection rights or statutory priority of tax liens in some contexts).
If a third party later claims the funds, a prior consent order may be challenged if notice was inadequate or the consent was procured by fraud.
Recordation: after distribution, make sure lien releases or satisfactions (mortgage satisfaction, UCC termination, release of judgment liens) are properly recorded if applicable.

Example hypotheticals

Two short hypotheticals to illustrate:

Partition sale: Three co-owners sell property through a court-ordered partition sale. All three sign a stipulation allocating sale proceeds per their interests, and a junior lienholder signs a subordination and release. The parties file the proposed consent order with proof that no other liens exist. The judge signs the order and the clerk directs the sheriff to disburse funds per the order. No hearing is needed because all interests were joined and no statute required a confirmation hearing.
Foreclosure surplus: A foreclosure sale generates surplus funds after satisfying the mortgage. The mortgagee and debtor agree how to divide surplus, but a judgment creditor who was not served later appears and objects. Because the creditor had a potential priority claim, the court refuses to approve distribution without a hearing and proper notice to that creditor. The parties must provide formal notice and either get the creditor’s consent or have the court decide priorities.

Helpful Hints

List every potential claimant before drafting an agreement. Missing claimants create risk.
Use clear language in the proposed order describing amounts, payees, and the exact mechanism for disbursing funds (sheriff, escrow, clerk, receiver).
Attach proof of service or signed waivers from all parties and any necessary governmental lienholders.
Ask the court to retain jurisdiction to enforce the order and resolve disputes over distribution—this gives you a quicker path if disputes arise later.
Consider placing funds in an escrow or registry of the court if there is any dispute; this protects the disbursing party from later claims while the court decides rights.
Check local court practices and the assigned judge’s preferences—some judges routinely sign agreed orders; others require a short on-the-record explanation before entry.
If you are unsure whether a statute requires a hearing (for example, specific foreclosure, probate, or tax-sale statutes), check the applicable MCL provisions on the Michigan Legislature site: legislature.mi.gov, or consult counsel.

Disclaimer: This article explains general principles of Michigan procedure and is for educational purposes only. It does not constitute legal advice. Laws change and every case turns on its specific facts. Consult a licensed Michigan attorney before relying on this information.