Michigan Debt Collection Laws: Know Your Rights in 2024
Michigan residents have strong protections against abusive debt collectors under state and federal law. The six-year statute of limitations limits how long collectors can sue you. If collectors violate your rights, you can file complaints or sue them for damages.
Get Free CounselingMichigan residents have powerful protections against aggressive debt collectors. Two state laws regulate how collectors can pursue you for unpaid debts. These laws cover both third-party collection agencies and original creditors.
Both laws mirror federal protections. They prohibit harassment, deception, and abuse during debt collection.
Overwhelmed by Michigan Debt Collectors?
Stop the harassment and reduce your monthly payments. Credit counselors can negotiate with collectors on your behalf and create an affordable payment plan within 24 hours.
Lower Your Payments NowThe statute of limitations for credit card and medical debt in Michigan is six years. After that, collectors can’t sue you for the debt.
Michigan’s Debt Collection Laws Explained
Michigan doesn’t use fancy names for its debt collection laws. But they pack serious punch. You can find these protections in Section 339.915 and 445.251 of the Michigan Occupational Code.
Section 339.915 regulates third-party debt collectors. Section 445.251 regulates original creditors.
Under Michigan law, debt collectors cannot:
- Mislead or deceive you to collect a debt
- Create forms that look like official legal documents
- Misrepresent your legal rights
- Threaten you with arrest or jail time
- Contact your employer about your debt
- Use or threaten violence against you
- Use profane language or harass you
Third-party collection agencies must also hold a valid state license.
These protections work alongside federal law to shield you from abusive collectors.
How Federal Law Protects Michigan Residents
The Fair Debt Collection Practices Act (FDCPA) is a federal law. It regulates third-party debt collection nationwide. Michigan’s state laws supplement the FDCPA beautifully. They extend similar protections to original creditors too.
The FDCPA requires debt collectors to:
- Send you written validation of the debt within five days
- Stop contacting you if you request it in writing
- Honor restrictions on when and where they can contact you
- Respect your privacy and avoid public embarrassment
Debt collectors cannot:
- Contact you before 8 a.m. or after 9 p.m.
- Call you at work if you tell them not to
- Discuss your debt with anyone but you or your attorney
- Lie about the amount you owe or their identity
- Threaten legal action they don’t intend to take
- Use obscene or abusive language
- Publish your name on a list of debtors
- Continue contacting you after receiving a written cease letter
Want to learn more? Check out our comprehensive guide to FDCPA violations.
What To Do When Debt Collectors Break the Law
Collectors who violate Michigan law face serious consequences. You have two main options: file a complaint or sue them directly.
File a Complaint With Authorities
Report illegal debt collection behavior to the Michigan Attorney General. Use their Consumer Complaint Form to document violations.
If a third-party collector won’t provide their license number, they may be operating illegally. File a complaint with the Bureau of Professional Licensing.
You can also report FDCPA violations to the Consumer Financial Protection Bureau (CFPB). The CFPB investigates consumer complaints and enforces federal debt collection laws.
Sue the Debt Collector for Damages
You have the right to sue collectors who break the law. File your lawsuit in local or state court for state law violations.
If you win, you may receive actual damages or $50, whichever is greater. Willful violations can triple your actual damages or award you $150 minimum.
The court usually orders collectors to pay your attorney fees and court costs.
For FDCPA violations, you can file a federal lawsuit. Winning may award you actual damages plus up to $1,000 in statutory damages. You’ll also recover attorney and court fees.
Statute of Limitations for Michigan Debt
Michigan gives debt collectors six years to sue you for most consumer debts. The clock starts from your last payment or the date you defaulted.
The six-year limit applies to:
- Credit card debt
- Medical debt
- Personal loans
- Debts backed by oral or written contracts
After six years, the debt becomes “time-barred.” Collectors can’t win a lawsuit against you. But they can still try to collect the debt through phone calls and letters.
You must raise the statute of limitations as a defense if sued. The judge won’t dismiss the case automatically. That’s why you must respond to any lawsuit, even for old debts.
Be extremely careful when collectors contact you about old debts. Making even a small payment can restart the six-year clock. Don’t acknowledge the debt or promise to pay anything.
Always request debt validation before discussing any debt with a collector. Learn more in our guide to statute of limitations on debt.
What Debt Collectors Can Legally Do
Even with legal limits, collectors still have many tools to pursue you.
Contact You or Take Your Car
Expect phone calls and letters when you fall behind on payments. Collectors will contact you frequently within legal boundaries.
Auto lenders have special rights. If you default on a car loan, the lender can repossess your vehicle without a court order. They don’t need your permission or advance warning.
Sue You in Court
Debt collectors frequently file lawsuits to force payment. They typically seek wage garnishment orders. Michigan law limits how much they can take from your paycheck.
Without wage income, collectors may pursue bank levies or property liens instead.
You can fight back without hiring a lawyer. Collectors must prove you owe the debt and they have legal standing to collect it. Many collection lawsuits have weak evidence.
Always respond to any lawsuit. Ignoring it guarantees you’ll lose by default. Filing your response is straightforward paperwork.
Use a free online tool to generate your court response forms. Or get help from our partner Solo, which has helped over 280,000 people respond to debt lawsuits and settle for less.
Debt Relief Options for Michigan Residents
About 25% of Michigan residents have debt in collections. Consumer debt reached record highs in 2023. Many people struggle to keep up with monthly bills.
You have options to get relief. Consider getting free guidance from an accredited credit counselor. Our partner Cambridge Credit Counseling can help you understand your choices.
Common debt relief strategies include:
- Debt management plans: Lower interest rates and consolidate payments into one monthly bill
- Debt consolidation: Combine multiple debts into a single loan with better terms
- Bankruptcy: Eliminate qualifying debts and get a fresh financial start
A credit counselor will review your specific situation. They’ll recommend the best path based on your income, expenses, and debt amount.
Don’t wait until collectors sue you. Taking action early gives you more options and better outcomes.