Michigan debt: six years, two collection laws, and licensed agencies

Six years for breach of contract (MCL 600.5807(8)), which covers credit cards, treated as open accounts, as well as medical bills, written and oral agreements.

The six years can restart if you make a payment or otherwise acknowledge the debt. A creditor can still win a default judgment after the time limit if you do not raise it as a defense, and a judgment lasts 10 years and can be renewed. So an old debt still needs a written answer if you are sued.

Michigan has two collection laws that mirror the federal one: Article 9 of the Occupational Code (MCL 339.901 and following) for collection agencies, and the Collection Practices Act (MCL 445.251 and following) for others who collect, including original creditors. The Collection Practices Act covers only consumer debts, meaning purchases made primarily for personal, family or household purposes.

Third-party collection agencies must be licensed through the Department of Licensing and Regulatory Affairs (LARA). You can check an agency's license with LARA before you pay. The federal dispute right applies to agencies and debt buyers: a written dispute inside the validation period makes the collector stop until it mails verification.

After the 6-year limit runs out, a collector must not sue or threaten to; read what to do about an old debt before paying anything.

Limits vary a lot between states: by comparison, New Hampshire sets 3 years and South Dakota sets 6 years for similar debts.

Before paying anything in Michigan, read whether to pay a collection agency and how to request debt validation.

Michigan residents often hear from national agencies like National Collegiate Student Loan Trusts and National Credit Systems; see our guides to each.

Sued in Michigan? Do not miss the deadline: read how to get a debt lawsuit dismissed before you respond.

Michigan follows the federal limit: the lesser of 25% of disposable earnings or the amount above 30 times the federal minimum wage. Michigan adds no extra limit for ordinary consumer debt.

Michigan distinguishes periodic garnishments of wages from non-periodic garnishments of one-off sums such as bank accounts and tax refunds. A bank account can be reached by a one-off garnishment even when your wages are not being garnished.

Already facing a garnishment in Michigan? Our wage garnishment guide covers exemption claims, hardship and how long a garnishment lasts.