Michigan Debt Collection Laws

Many people assume, based on the Statute of Limitaions in Michigan, that if they just “wait it out,” their debt collectors will exhaust their collection efforts or the time will run out for the creditor to collect on the debt. What people don’t realize is there are loopholes that can keep Michigan debt collection laws ongoing, creating continued financial stress and a reduced credit score. Instead of prolonging bad credit, find a proactive and lasting debt resolution.

At Acclaim Legal Services, we specialize in helping people eliminate or consolidate their debt to work towards a debt-free existence. We offer free consultations to discuss your questions and provide qualified legal advice on your debt resolution options. Call us today at 866-261-8282 or schedule an appointment online at any of our seven Michigan office locations: Detroit, Southfield, Ann Arbor, Warren, Dearborn, Lansing and Flint.

The Fact About Michigan Debt Collection Laws and the Statute of Limitation

• According to Michigan law, your creditor has up to 6 years (from the date of your last payment) to collect on a debt, including obtaining a judgment on the debt.
  • By getting a judgment, your creditor can pursue collections (likely a garnishment) almost indefinitely as long as they renew the judgment every 10 years.
  • The statue of limitations no longer applies if your creditor gets a judgment or default judgment and keeps it active by renewing it.

• Just because a debt has been dormant, it does not mean that your creditor won’t resume collection efforts years down the road or sell the debt to a collection agency. Selling a debt to a collection agency typically results in renewed, aggressive collection efforts to collect on the debt.
  • This third party collection agency can also pursue a judgment to extend their collection timeframe and allow them to apply for a garnishment.

• A Charge-off status (link to: ) linked to a debt on your credit report does not mean that you are no longer legally obligated to pay the debt. This is merely an accounting practice for your creditor(s). This creditor could still pursue a judgment or sell the debt to a collection agency (who could also pursue a judgment).

• If you received a notice of complaint (a lawsuit filed against you) on a debt that is past what you believe to be the Statute of Limitations, you must still respond to the suit. The Statute of Limitations is an “affirmative defense”. If you ignore the notice of complaint, your creditor can obtain a deficiency judgment to renew collection efforts even if it has been past the six years Statute of Limitations. This makes the debt legally binding again and this judgment can also be continually renewed and/or sold to a debt collection agency until the debt has been satisfied.

• Lingering, unaddressed debt damages your credit score and will most likely compromise your efforts to obtain new credit sources or reasonable interest rates.
  • 35% of your credit score is based on your payment history. According to FICO, delinquent accounts and derogatory credit reportings will have the largest impact toward a poor credit score.
  • 30% of your credit score is based on your total debt load. Even though a particular debt may seem dormant, it still counts toward your total debt-to-income ratio and can continue to drag down your credit score.

The bottom line is that it is best to deal with your debt proactively, find the best debt resolution option and begin rebuilding your credit score. Time is not your ally when it comes to debt collections and maintaining a positive credit score. Call us today at 866-261-8282 for a free consultation on your debt resolution options. We offer free phone or in-office consultations with appointments available daily.

Consolidate and Reduce Your Debt

One way to resolve your debt problems is through debt consolidation. We help clients find lasting debt resolutions through the use of a Chapter 13 debt consolidation plan.

A Chapter 13 reorganization plan offers:

• Superior creditor protection against judgments, garnishments, home foreclosure, repossession, etc.
• Standardized repayment terms based on your income and ability to pay, not your creditor’s demands.
  • All unsecured creditors are paid back at 0% interest.
• Ability to legally eliminate debt without negotiating individually with each creditor.

The Chapter 13 bankruptcy also provides distinctive debt reduction opportunities, such as:

• Removal of a second mortgage or home equity loan

• Pay only what you can afford toward unsecured debts such as credit cards, medical bills, loan deficiency debts, judgments, personal loans, etc. We propose the terms, not your creditors.

• Possible payment reduction for vehicle loans and lowering of interest rates.

• Reduced principal balance on rental property(s).

The Chapter 13 program will stop a judgment or debt collection and provide lasting resolution. Call us today at 866-261-8282 to understand your options for utilizing this powerful debt consolidation program.

Eliminate Debt

A Chapter 7 Bankruptcy is an option if you are just not in the position to reasonably pay back your debts. This program legally eliminates unsecured debts and wipes the credit slate clean, allowing you to make a fresh financial start.

Within 3 -5 months, you will legally shed debts such as:

• Credit Cards
• Medical Bills
• Loan deficiency debt from home foreclosure or vehicle repossession
• Personal loans
• Old utility bills
• Judgments and garnishment

Don’t let your debt continue to interfere with your life and future plans. Total debt elimination is available to help you make a fresh start and a clean break from your creditors.

Resolve Your Debts….Today

Don’t spend another sleepless night worrying about your finances. Debt resolution is not a waiting game; it is a proactive process that helps you regain financial control.

We offer free in-office or phone consultations to review your personal circumstances, analyze your situation and advise you on the best course of action. We specialize in bankruptcy law, debt resolution, foreclosure prevention and credit repair. We offer same day legal protection from your creditors.

We have offices in Detroit, Southfield, Ann Arbor, Warren, Dearborn and Flint, Michigan. Please call us toll free at 866-261-8282 or click here to schedule a consultation right now.