Nexa provides reputation-safe, equipped with all 50-state collections license, offering free credit reporting, free litigation/bankruptcy scrubs, and zero onboarding fees. Secure – SOC 2 Type II & HIPAA compliant.
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The Michigan Legal Landscape (2026 Summary)
Michigan is a strong recovery state if you act within the legal window, but the rules governing how you communicate are among the strictest in the Midwest.| Debt Type | Statute of Limitations | Michigan Compiled Law (MCL) |
|---|---|---|
| Written & Oral Contracts | 6 Years | MCL § 600.5807(9) |
| Open Accounts & Accounts Stated | 6 Years (even for goods sales, per Fisher v. Sweebe) | MCL § 600.5807(9) |
| Breach of a Sales Contract (UCC) | 4 Years | MCL § 440.2725 |
| Medical Debt | 6 Years | Reporting reform pending, see below |
| Wage Garnishment | ALLOWED (25% Cap) | MCL § 600.4011 |
- The Open-Account Advantage Most Agencies Miss. Michigan’s UCC gives a 4-year window for breach of a sales contract, which sounds like bad news for suppliers and distributors. But in Fisher Sand & Gravel Co. v. Neal A Sweebe, Inc., the Michigan Supreme Court held that open-account and account-stated claims fall under the 6-year contract period instead, even when the underlying debt came from selling goods. For automotive suppliers, distributors, and manufacturers running trade accounts, that’s two extra years of enforceable life on accounts a less-informed agency might write off as time-barred.
- Medical Debt Reform Is Pending, Not Law. Michigan’s Senate passed a package (SB 449–451 and SB 701–702) on March 11, 2026 that would prohibit consumer reporting agencies from including medical debt in credit reports, cap medical debt interest at 3% annually after a 90-day grace period, and restrict liens, foreclosures, and wage garnishment tied to medical debt. These bills were referred to the House and have not been enacted. Anyone telling you Michigan already bans medical debt reporting is describing a bill, not a law. That said, the strategic conclusion holds regardless: credit-report leverage on medical debt has been eroding nationally for years, so a recovery strategy built on documented mediation and legitimate judicial remedies is the durable approach either way, and it won’t need rebuilding if this package does pass.
- Michigan Debt Can Be Revived, Unlike Some States. A partial payment or written acknowledgment restarts Michigan’s 6-year clock. This is the opposite of states like Maine and Maryland, where an expired limitations period is permanently dead. It’s an advantage, but the RCPA separately prohibits misleading a consumer into unknowingly reviving a time-barred debt, so the tactic has to be handled carefully and transparently.
- The 2026 Wage Floor. Michigan’s minimum wage rose to $13.73/hour on January 1, 2026 under Public Act 6 of 2025, rising again to $15.00 in 2027. Higher protected income means account-level data scrubbing matters more, pursuing judgments against debtors below the threshold burns legal spend for no return.
- Two Laws, Two Jobs. LARA licensing under Occupational Code Article 9 (MCL § 339.901) governs who may operate as a collection agency. The separate Regulation of Collection Practices Act (MCL § 445.251) governs conduct, and notably reaches original creditors collecting their own debts, not just third-party agencies, so a business’s own in-house billing staff are bound by it too.
Cost-Effectiveness: The Nexa Advantage
- Fixed-Fee Recovery ($15/account): Ideal for early-stage receivables, essential for acting well within the 6-year window. Debtors pay 100% directly to you, 0% commission. See the full pricing breakdown.
- Contingency Service (20%–40%): Performance-based recovery. No Recovery, No Fee. We take the risk; you get the revenue.
What $50,000 in Delinquent Michigan A/R Actually Nets You
A static example on a $50,000 delinquent portfolio, assuming an 80% eventual recovery rate ($40,000 collected):| Nexa $15 Fixed Fee Service | Traditional 40% Contingency | |
|---|---|---|
| Amount recovered | $40,000 | $40,000 |
| Fee (50 accounts × $15) | $750 | $16,000 (40% of recovered) |
| You keep | $39,250 (98.1%) | $24,000 (60%) |
Industries We Serve in Michigan
- Commercial (B2B): B2B trade lines, manufacturing suppliers, automotive supply chain accounts, and wholesale vendor invoices across Detroit, Grand Rapids, and Lansing. This is where the Fisher v. Sweebe open-account rule matters most, we assess which limitations period actually applies before writing an aged trade account off.
- Small Businesses: Professional services, local trade contractors, creative agencies, and commercial suppliers statewide, where a single unpaid invoice is a genuine cash-flow event rather than a rounding error.
- Restoration Companies: Property mitigation invoices, fire and water restoration balances, and uncollected property owner insurance deductible remainders, resolved without souring the homeowner relationship mid-claim.
- Alarm & Security Companies: Monthly monitoring contracts, equipment financing balances, and security service defaults, recovered without triggering the local-reputation damage this referral-driven industry depends on avoiding.
- Schools & Educational Institutions: Tuition balances, private school fees, vocational training fees, and higher education student account remainders, from Big Ten research institutions to K-12 charter and private schools.
- Healthcare & Outpatient Clinics: 100% HIPAA-compliant medical debt recovery for patient co-pays, high-deductible remainders, and private practice balances, built on empathetic mediation rather than credit-report pressure, which means no strategy rebuild if the pending Senate package becomes law.
- Automotive & Advanced Manufacturing: Specialized recovery for the Detroit and Grand Rapids industrial corridors, managing high-value sub-contractor, supply chain, and raw material disputes.
- Accountants & CPA Firms: Recovery of professional service fees without damaging the local client rapport you’ve built.
- Banks & Credit Unions: Expert handling of delinquent consumer loans and deficiency balances using Michigan’s 10-year judgment renewal window.
- Construction & Trades: Revenue recovery for HVAC, electrical, and general contractors, with expertise in the Michigan Construction Lien Act and its strict 90-day filing deadlines.
Recent Michigan Recovery Results
Case 1: Ann Arbor Specialty Medical Group (Medical)
- The Problem: $150,000 in aging debt, with the clinic uncertain how pending state medical debt legislation would affect collectability.
- The Result: Nexa implemented a compliance-first mediation strategy, recovering $98,000 in 80 days without relying on credit reporting at any stage.
Case 2: Grand Rapids Industrial Parts Supplier (B2B)
- The Problem: A $65,000 unpaid contract from a tier-two auto supplier claiming cash flow issues, an account the client’s prior agency had flagged as likely time-barred under the UCC’s 4-year rule.
- The Result: Assessed as an open account under Michigan’s 6-year period, we secured a full $65,000 recovery plus costs within 40 days of the initial demand.
Frequently Asked Questions (FAQ)
How does Nexa maintain licensing under LARA and the Michigan Occupational Code Article 9 (MCL § 339.901)?
Through active LARA licensing under Article 9, which governs who is authorized to operate as a collection agency in Michigan, combined with separate adherence to the Regulation of Collection Practices Act (MCL § 445.251) conduct standards. These are two distinct requirements, and the second one reaches original creditors too, not just outside agencies.Has Michigan actually banned medical debt from credit reports?
Not yet. A Senate package (SB 449–451, SB 701–702) that would prohibit medical debt credit reporting and cap medical debt interest at 3% passed the Michigan Senate in March 2026 and was referred to the House, where it has not been enacted. Descriptions of this as current Michigan law are premature. We build medical recovery around mediation and judicial remedies rather than credit-report leverage, which means nothing needs rebuilding whichever way the House goes.How does Michigan’s 6-year statute of limitations (MCL § 600.5807) impact B2B open account recovery?
Favorably, and more so than many businesses realize. The 6-year period applies to contracts generally, and the Michigan Supreme Court has held that open-account and account-stated claims also get the full 6 years rather than the UCC’s shorter 4-year window, even when the debt arose from selling goods. Aged trade accounts a prior agency dismissed as time-barred are worth a second assessment before being written off.How does the $15 Fixed Fee Service work for restoration companies collecting unpaid property owner deductibles?
The same way it works for any early-stage account: a professional demand letter sent while the balance is still fresh, before insurance-adjuster delays and homeowner disputes harden into a standoff. The property owner pays the restoration company directly, and the company keeps 100% of what’s recovered.Can schools use Nexa to recover overdue tuition balances diplomatically?
Yes, and this is a case where tone genuinely determines outcome. Educational accounts involve families who may return, or who talk to other families in a tight enrollment community, so outreach stays professional and solution-oriented rather than confrontational, protecting enrollment relationships while resolving the balance.Popular cities