Debt Collection Laws in Michigan: Know Your Rights

Michigan residents have strong legal protections against aggressive debt collectors. Both state and federal laws give you clear rights when dealing with collection agents.

MI Comp L § 445 and the Fair Debt Collection Practices Act protect you. You have options when collectors call, email, or send letters about alleged debts.

Understanding these protections helps you fight back against unfair collection practices.

Michigan Debt Collection Laws Protect You

MI Comp L § 445 defines debt collectors and regulates collection practices in Michigan. The law sets clear boundaries for how collectors can operate.

You deserve to know exactly what protections you have under state law.

What Is a Debt Collector in Michigan?

MI Comp L § 445.251 spells out who qualifies as a debt collector. Anyone directly or indirectly trying to collect payment on a claim counts as a collector.

The law covers people representing themselves as collection agencies. It also includes those who perform collection activities for others.

Someone using forms or written demands for collection falls under this definition. Even using a fake name to make you think a third party is collecting counts.

However, certain people and entities are excluded from this definition:

• Regular employees collecting amounts for their employer in the employer’s name
• Banks, trust companies, savings and loan associations, and credit unions collecting their own claims
• Businesses licensed by the state under a regulatory act where collection activity is regulated
• Abstract companies doing escrow business
• Licensed real estate brokers or salespersons handling claims related to their real estate business
• Public officers or persons acting under a court order
• Attorneys handling claims and collections on behalf of clients and in their own name

The law defines other important terms related to debt collection practices. These definitions form the foundation for prohibited collector actions.

Michigan Debt Collectors Cannot Take These Actions

MI Comp L § 445.252 lists specific prohibited practices for debt collectors. Michigan law bans many aggressive and deceptive tactics.

Debt collectors in Michigan cannot:

• Pretend to be lawyers or credit bureaus unless they actually are
• Use forms that look like court or government documents
• Lie, mislead, or hide the reason for contacting you about a debt
• Misrepresent legal actions, legal rights, or consequences of not paying
• Communicate directly with you if you have a lawyer representing you
• Share information about your debt with your employer without your permission
• Use law enforcement officers to collect a debt
• Use or threaten physical violence to collect a debt
• Publicly list debtors, except for credit reporting or responding to credit inquiries
• Publicly shame you, except in legal proceedings
• Harass you with repeated calls, especially at inconvenient times
• Use rude or obscene language when speaking to you
• Use illegal postal methods to collect a debt
• Communicate with you by postcard about a debt
• Employ unlicensed individuals to collect claims

Collectors must call you only between 8 a.m. and 9 p.m. unless you agree otherwise. They must always identify themselves clearly when they call.

Collectors cannot make you pay for the call. They must have procedures to prevent employees from breaking these rules.

If a debt collector violates these rules, our partner Solo can help you respond effectively and protect your rights.

You May Be Entitled to Civil Remedies Under Michigan Law

MI Comp L § 445.257 provides financial penalties for collector violations. You have the right to compensation when collectors break the law.

Debt collectors who violate Michigan law must pay you damages. You receive either your actual damages or $50, whichever is greater.

Willful violations trigger even higher penalties. Judges can order treble damages for intentional violations.

Treble damages mean three times your actual damages or $150, whichever is greater. Courts take willful violations seriously and punish collectors accordingly.

The Fair Debt Collection Practices Act Offers Michigan Debtors Additional Protection

The federal Fair Debt Collection Practices Act (FDCPA) was passed in 1977. Congress created landmark legislation governing how debt collectors interact with consumers.

The FDCPA requires debt collectors to:

• Identify themselves and state they are calling about a debt
• Send a validation letter within five days of first contact
• Stop collection attempts when you demand debt validation

The validation letter must include who they are and who they represent. It must show the balance owed and your right to dispute the debt.

When you request validation, collectors must immediately stop collection efforts. They cannot resume until they provide verification to you.

The FDCPA also prohibits specific collector actions:

• Contacting you before 8:00 a.m. or after 9:00 p.m.
• Contacting your friends, family, or neighbors about your debt
• Contacting your workplace after you tell them not to
• Using profane language during discussions with you
• Threatening arrest or criminal prosecution for the alleged debt
• Sending false or inaccurate information to credit bureaus
• Using misleading or deceptive representations in their communications

You may be eligible for up to $1,000 per FDCPA violation. Federal law gives you powerful tools to fight back against abusive collectors.

Settle Your Debt in Michigan

Ignoring debt collectors can lead to lawsuits. But not every debt lawsuit is justified or accurate.

Responding to a lawsuit buys you time to work out a settlement. You can often settle your debt for less than you originally owed.

Most debt settlements involve paying around 60% or more of the debt’s worth. You make a one-time payment and the creditor waives legal actions.

Always get settlement terms in writing before paying anything. Pay the creditor before your court date to avoid judgment.

Debt settlement works best with professional guidance. Working with experienced negotiators increases your chances of favorable terms.

Settlement offers must be documented carefully. You need proof that the creditor agreed to accept less than the full amount.

Professional debt settlement services handle negotiations for you. They know what collectors will accept and how to structure agreements.

How to Respond to a Michigan Debt Lawsuit

You have 21 to 28 days to respond to a debt lawsuit in Michigan. The summons tells you exactly how long you have.

Filing an Answer is your first step in defending yourself. Your Answer admits or denies each claim in the complaint.

Affirmative defenses protect you from unfair collection lawsuits. Common defenses include statute of limitations, mistaken identity, and lack of proof.

Our partner Solo makes it easy to create a proper Answer. The step-by-step process asks all necessary questions to complete your document.

An attorney reviews your Answer before filing. You get professional guidance at an affordable price.

Filing an Answer gives you leverage to negotiate settlement. Collectors know you’re willing to fight and may offer better terms.