Debt Collection Laws in Michigan
If you're dealing with debt collection in Michigan, here's what actually protects you: a cap on how much of your paycheck can be garnished, a base amount of home equity and bank funds creditors can't touch, and a deadline after which a debt lawsuit generally can't succeed. Current as ofJuly 2026 — sourcing for each section is linked below.
Michigan's 2026 debt outlook
Bankruptcy filings in Michigan ran 23,080 in the 12 months ending March 2026, versus 20,698 the year before (+11.5%), per official U.S. Courts data. See the full 51-state filing ranking.
Serious mortgage delinquency (90+ days late) in Michigan sits at 0.7%, trending toward roughly 0.8% by the end of 2026 (elevated and rising). See the full 51-state outlook and methodology.
Debt collection complaints to the CFPB from Michigan residents ran 3,625 so far in 2026, versus 3,745 over the same window in 2025 (-3%). See the full state-by-state surge ranking.
How much of my paycheck can be garnished in Michigan?
Michigan doesn't set its own percentage cap for ordinary judgment-debt garnishment — it follows the federal Consumer Credit Protection Act limit: the lesser of 25% of your disposable weekly earnings, or the amount by which those earnings exceed 30 times the federal minimum wage. MCL 600.4012 governs the procedure (a $35 garnishee fee, priority when multiple garnishments are filed) rather than the percentage itself.
A periodic wage garnishment can continue until the judgment is paid, subject to statutory procedure. A bank garnishment is nonperiodic, but Michigan law does not support a general 182-day expiration statement for it.
Tier: Federal formula, no state enhancement — see the full 20-state ranking.
Can a creditor take money from my bank account in Michigan?
Michigan has no general exemption for ordinary bank cash outside bankruptcy. MCL 600.6023 protects listed property and income categories, so a frozen account needs a source-specific state or federal exemption.
Those numbers are much smaller than what you'd get filing for bankruptcy, where a separate, inflation-adjusted exemption applies instead (see the homestead section below) — a 2023-24 bill (SB 409) raised that bankruptcy-specific figure under MCL 600.5451, not the general MCL 600.6023 amount discussed here, so the old $1,000 outside-bankruptcy figure is unaffected and still applies as of 2026.
Is my home protected from creditors in Michigan?
Michigan has two different homestead numbers, and mixing them up matters: a small, old general-execution exemption of $3,500 under MCL 600.6023, and a much larger bankruptcy-specific exemption under MCL 600.5451 — currently $51,150, or $76,725 if you or a dependent are 65 or older or disabled, effective for cases filed on or after April 1, 2026.
The bankruptcy figure is adjusted for inflation every three years, so it's the one that actually matters for most people weighing a Chapter 7 filing. The $3,500 general-execution figure is decades-old and only relevant outside of bankruptcy, where it offers far less protection.
How long can a debt collector sue me in Michigan?
In Michigan, a creditor has 6 years to sue you over most contract debt — written or oral — under MCL 600.5807. A 2018 amendment consolidated what used to be separate rules for different contract types into this single general 6-year period.
| Debt type | Statute of limitations |
|---|---|
| Credit card / written contract | 6 years |
| Oral or open-account contract | 6 years |
The clock generally starts running from your date of default, and a partial payment or written acknowledgment of the debt can restart it — worth knowing before agreeing to a 'good faith' payment on an old debt.
See how Michigan's 6 years deadline compares to all 20 states.
Does Michigan have its own debt collection law beyond the federal FDCPA?
Michigan actually runs two overlapping protections: the Occupational Code licenses and regulates third-party collection agencies, while a separate Collection Practices Act (MCL 445.251–445.257) bans specific abusive tactics for a broader group of 'regulated persons' that explicitly includes original creditors — banks, credit unions, and in-house collection staff — not just outside agencies.
That second law closes a gap the federal FDCPA leaves open, since federal law generally doesn't reach original creditors collecting their own debts. Michigan's version bans roughly 19 categories of conduct, including fake court or government-looking letterhead, threats of violence, calls outside 8 a.m.–9 p.m., and disclosing your debt to your employer without permission.
Where can I find free or low-cost legal help in Michigan?
If you're dealing with a debt lawsuit, garnishment, or collector dispute in Michigan, a good starting point is the state bar's lawyer referral service or one of the legal aid organizations below — both can point you to self-help court resources even if you don't qualify for free representation.