Collection Agencies in Michigan and Laws

Michigan Debt Collection Laws

Here are some relevant federal and state laws that were in effect as of 2021:

1. Fair Debt Collection Practices Act (FDCPA): This federal law protects consumers from abusive, deceptive, or unfair debt collection practices. It sets limitations on when and how debt collectors can contact consumers and gives consumers the right to dispute debts and obtain information about the debts.

2. Fair Credit Reporting Act (FCRA): Another federal law, the FCRA regulates the collection and use of consumer credit information. It provides consumers the right to access their credit reports and to dispute any inaccuracies.

3. Michigan Collection Practices Act (MCPA): This state law regulates the practices of collection agencies in Michigan. It prohibits certain behaviors, such as misrepresentation, harassment, and unfair practices. Collection agencies must be licensed under this Act, and they are required to provide a bond.

4. Statute of Limitations in Michigan: In Michigan, there is a time limit for when creditors can sue consumers for unpaid debts. As of 2021, the statute of limitations for written contracts was six years, and for open accounts like credit cards, it was also six years. This period generally starts from the date of the last activity on the account or the date of default.

5. Michigan Garnishment Laws: If a creditor obtains a court judgment against a debtor in Michigan, they can garnish the debtor’s wages or bank accounts. Michigan law limits the amount that can be garnished, generally following federal guidelines which limit garnishments to the lesser of 25% of the debtor’s disposable earnings or the amount by which the debtor’s disposable earnings exceed 30 times the federal minimum wage.

6. Exemptions in Michigan: Michigan has laws that protect certain types of property from being taken by creditors to satisfy a debt judgment. These include a homestead exemption and exemptions for certain types of personal property and income.

7. Notification Requirements: Similar to the FDCPA, debt collectors in Michigan must provide consumers with a written notice containing information about the debt, the name of the creditor, and informing the consumer of their right to dispute the debt within 30 days of the initial communication.

Please make sure to verify the most current legal information or consult an attorney or legal advisor with expertise in debt collection laws in Michigan for the most up-to-date details on debt collection laws in the state.

In case of an FDCPA law violation, a debtor can report the communication from a debt collector to the Michigan Attorney General’s Office, CFPB and the FTC.

A complete list of federal laws to be followed by all collection agencies in USA are listed here: Debt collection laws 

Michigan Debt Statistics

• The average person in Michigan carries over $36K in debt.
• The average Student Loan in Michigan is about $31,000.
• The average mortgage debt in Michigan is $132K in 2018.
• The average credit card debt in Michigan as of 2019 is around $7,380
• An average Michigan person has an auto loan balance of $14,700.
• Michigan adults had an average credit score of 677 in 2018

Michigan Geographical Stats

• Population in Michigan : 9.8 million (year 2018)
• Number of millionaires: 214K  ( year 2018)

Michigan debt collection agency can collect all across the state including these cities Detroit, Grand Rapids, Warren, Sterling Heights, Lansing, Ann Arbor, Flint, Dearborn and Livonia