Michigan Debt Collection Laws

While those facing unmanageable debts have many problems to deal with these days, one of them should not be unreasonable and inappropriate harassment by creditors or collection agencies. That is why there are a number of federal and state laws protecting debtors today, including the Fair Debt Collection Practices Act and the Fair Credit Reporting Act. While state laws vary, many confirm and expand upon the federal laws, protecting the rights of debtors and providing avenues by which they and their attorneys can find relief.

Debt Collection in Michigan

While federal laws apply to all debt collection processes in Michigan, there are some state laws that also apply. Anyone subject to a violation of these laws should contact the Attorney General’s office, as they have jurisdiction over these issues in the state of Michigan.

Michigan Statute of Limitations

While we are all responsible to pay our debts in a timely manner, if there are complications or if a creditor loses track of what you owe, there are state statutes of limitations by which they must pursue collection. These statutes can also vary by type of debt and type of creditor; however, in general, in Michigan the statute of limitations on debt collection is 6 years, under breach of contract laws. Other statutes of limitations regarding outstanding debts include:

  • Judgments from legal awards have a statute of limitations period of ten (10) years, with option to renew actions up to twenty (20) years
  • Breach of contract debts possess a statute of limitations of no more than six (6) years
  • Breach of contract during sale of goods has a statute of limitations period of no more than four (4) years, which will include deficiency judgments following repossession

Collections Practices and Rules for Michigan

Federal laws concerning debt collections are generally comprehensive, although some states, including Michigan, have additional statutes that apply in this area.

Legal Collections Actions

Collection agencies may act to collect unpaid debts and contact debtors about such debts through normal means, such as phone calls, faxes, emails, personal visits, or letters as long as they are licensed in the state of Michigan to do so

Illegal Collections Actions

  • Misleading or deceiving actions to speed the collection process, including threats that the collector cannot or will not keep
  • Communicating with a debtor when a lawyer is representing that debtor unless the attorney fails to respond to the creditor in a reasonable manner
  • Revealing information about what a debtor owes or the collection process to an employer unless such communication has been authorized by the debtor
  • Using threats, profanity, violence, or the threat of violence, in connection with debt collection
  • Revealing debt information either in lists of bad debts or other public notices, including sending collection requests or reports by postcard, except in an established credit reporting agency
  • Harassing or intimidating a debtor or contacting them outside of reasonable hours, generally before 8:00 a.m. or after 9:00 p.m., without permission
  • Using an unlicensed collection agency that is legally required to be licensed

Laws for Debt Harassment in Michigan

Michigan has enacted laws making it illegal to harass, oppress, or abuse a debtor in order to collect a debt that is owed in an unreasonable manner, including repeated phone calls, communications, or merely causing the phone to ring repeatedly at unusual times or places that are inconvenient to the debtor.

Michigan Debt Negotiation and Settlement Rules

In Michigan, there are several options for those who are facing circumstances where they are unable to pay their bills. Each of these options can be complicated and costly, so it can be wise to seek an attorney before attempting them:

  • Debt consolidation, whereby you seek to consolidate all debts into one monthly payment at a lower interest rate
  • Debt settlement, whereby debtors seek to negotiate with creditors with whom they are between 3 and 6 months behind in payments. This is usually facilitated by debt settlement company that establishes an escrow account to save up for a lump sum payment at some agreed upon point in the future. However, they can charge high fees and have a low success rate. A lawyer may be able to provide the same services in a more reliable method

Help from a Michigan Debt Collection Attorney

The financial world is filled with challenges today, and it is important to make sure debtors have solid advice that they can count on. A knowledgeable financial attorney can help guide them to reliable methods of dealing with creditors and salvaging their credit rating.

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