Michigan Debt Collection Laws: Wage Garnishment, Statute of Limitations, and Repossession

If a collector is pursuing you in Michigan, focus on the process first. A private creditor must sue you, win a judgment, and get a garnishment order from the court before any of your paycheck or bank account is legally at risk. The two beliefs that cause the most trouble, that a garnishment can start overnight, and that ignoring a lawsuit makes the problem disappear, are both wrong. Most Michigan garnishments trace back to a default judgment entered because the person being sued never answered the complaint, which makes responding to a summons and complaint the single most valuable thing you can do.

Michigan does not set its own, more generous wage-garnishment formula the way some neighboring states do. It relies on the federal floor. Where Michigan does stand out is in a stronger-than-federal job protection, in its own state-law rules on collector conduct, and in a dead statutory cross-reference that has confused practitioners for years.

Wage Garnishment in Michigan

Michigan has not enacted a state-specific wage-garnishment percentage or multiplier. A judgment creditor garnishing wages in Michigan is limited to the federal Consumer Credit Protection Act formula: the lesser of 25 percent of your disposable earnings for the week, or the amount by which your disposable earnings exceed 30 times the federal minimum hourly wage, currently $217.50 a week. Below that weekly threshold, nothing can be garnished for an ordinary consumer debt. MCL 600.4031 adds only two narrow, unrelated carve-outs: a 40 percent limit on proceeds from the sale of milk or cream, and a clause meant to apply the exemptions in a section numbered 7511.

That second clause is a genuine defect in Michigan's code. MCL 600.7511 does not exist; requesting the section directly returns an error. A 2023-2024 bill, SB 408, would have removed the dead reference along with making other exemption updates, but it died on a second reading in the House in December 2024 without passing, so the broken cross-reference remains in the statute as written. There is no functioning head-of-household wage exemption behind it.

Where Michigan goes beyond federal law is job protection. Under MCL 600.4015, a garnishee-employer cannot use the fact that an employee has had one or more garnishment actions brought against them as grounds for discipline or discharge, unlike the federal rule, which protects only the first debt. A wrongfully discharged employee is entitled to mandatory reinstatement and reimbursement of all lost compensation, enforceable through a civil action.

Michigan's state tax levy percentage was not confirmed against a primary source; the Department of Treasury reportedly gives 10 days' pre-levy notice, but do not assume a specific percentage without checking directly with Treasury or an attorney.

Michigan has no enacted medical-debt garnishment cap. A five-bill Senate package, including a 3 percent interest cap, a lien and foreclosure ban, and a garnishment ban for financially eligible patients, passed the Michigan Senate in March 2026 but has not become law; treat it as pending, not current, until it clears the House and is signed.

Bank Account Protections

Michigan's general property exemption statute, MCL 600.6023, does not include any exemption for money, bank deposits, or wages sitting in an account, only specific property categories: household goods up to $1,000, tools of the trade up to $1,000, homestead equity up to $3,500, and certain insurance and retirement funds. There is no self-executing dollar amount protecting cash in a Michigan bank account from an ordinary judgment creditor. SB 408, the reform bill that died in December 2024, would have added exemptions for public-assistance, unemployment, earned income tax credit, disability, and workers' compensation deposits, but none of that became law.

Federal protection fills much of the gap for benefit income specifically. Under 31 CFR Part 212, a bank that receives a garnishment order must review the account and protect an amount equal to the last two months of directly deposited Social Security, VA, and certain other federal benefit payments, automatically, without the account holder needing to claim an exemption first. That protection covers direct deposit only, not benefits later deposited by paper check.

Statute of Limitations on Debt in Michigan

Michigan sets a 6-year limitations period for contract debt under MCL 600.5807(9), covering an action to recover damages or money due for breach of contract. A residual 6-year period at MCL 600.5813 catches all other personal actions, including open accounts. Because both the contract-specific and residual periods land at 6 years, the written-versus-oral and credit-card classification fights that matter in other states are effectively moot in Michigan. A separate statute, MCL 600.2145, is sometimes cited for account debt, but it is an evidentiary affidavit-of-account statute, not a statute of limitations, and should not be relied on for the time limit itself.

Promissory notes follow the state's UCC Article 3 enactment, MCL 440.3118(1): 6 years from the due date for an ordinary note payable at a definite time, 6 years from demand for a demand note, or a 10-year bar if no demand is made and no principal or interest is paid.

Michigan requires a signed writing to revive time-barred debt. Under MCL 600.5866, a claim otherwise barred by the statute of limitations is revived by the debtor's acknowledgment or promise only if that acknowledgment is made in, or the promise is contained in, a writing signed by the party to be charged. The statute contains no separate clause addressing part payment, so whether a payment alone can serve as an acknowledgment sufficient to revive the debt is not resolved by the statute's text and depends on case law that was not confirmed for this page. Do not assume either that a payment is safe, or that it definitely revives the debt, without checking further.

A foreign-accrued claim is generally barred in Michigan if it would be barred by either Michigan's own period or the period of the state where it accrued, under the borrowing statute MCL 600.5861, except that Michigan's own period alone controls when the claim accrued in favor of a Michigan resident.

Two points hold regardless of classification. Time-barred debt is not erased debt: a collector can still ask you to pay, and it can remain on your credit report for up to 7 years under the Fair Credit Reporting Act, a separate clock. And suing or threatening to sue on debt after the statute of limitations has run is a flat violation of federal Regulation F (12 CFR 1006.26).

What Debt Collectors Can and Cannot Do

Third-party collectors working Michigan accounts answer to the federal Fair Debt Collection Practices Act and Regulation F. They cannot call before 8 a.m. or after 9 p.m. your local time, harass you, misrepresent the amount or legal status of a debt, or threaten to sue on a debt that is already time-barred. Within five days of first contacting you, a collector must send validation information.

The dispute right attached to that notice is worth getting exactly right. Under 15 U.S.C. 1692g(b), if you dispute the debt in writing within 30 days after you receive the validation notice, the collector must cease collection of the debt, or of the disputed portion, until it obtains verification of the debt or a copy of a judgment and mails that verification to you. It is a pause on collection, not a rule about credit reporting, and it is the 30-day written dispute that triggers it.

Michigan's own contribution is not limited to licensing. Article 9 of the Occupational Code, MCL 339.901 and following, licenses collection agencies and separately imposes a list of prohibited acts on them. MCL 339.915 bars a licensee from using forms that simulate judicial process, misrepresenting the legal status of an action or the rights of the creditor or debtor, communicating with a debtor who is actively represented by an attorney, and using a harassing, oppressive, or abusive method to collect a debt.

The state call-time rule is stronger than the federal one. MCL 339.915(n) provides that all communications shall be made from 8 a.m. to 9 p.m. unless the debtor expressly agrees in writing to another time, and it presumes that any telephone communication made from 9 p.m. to 8 a.m. was made at an inconvenient time in the absence of facts to the contrary. Federal law has no equivalent presumption, so a Michigan complaint about a late-night call starts from a better evidentiary position.

Michigan also runs its own validation procedure at MCL 339.918, parallel to the federal one: a written notice within 5 days of the first communication, a 30-day window to dispute in writing, and a duty to cease collection of the disputed debt until the agency obtains verification and mails a copy to the consumer. Violations of the article carry a private action under MCL 339.916 for actual damages or $50, whichever is greater, with a civil penalty of at least three times actual damages or $150 for a wilful violation, and an award of reasonable attorney fees and court costs.

Car Repossession in Michigan

Michigan enacted the standard UCC self-help rule at MCL 440.9609: a secured party may take possession through judicial process, or without judicial process if it proceeds without a breach of the peace. Michigan's statute does not define breach of the peace, leaving its exact boundaries to case law that was not confirmed for this page.

Unlike many neighboring states, no statutory pre-repossession notice or right-to-cure provision was located for Michigan motor vehicles. Michigan's Motor Vehicle Sales Finance Act regulates finance charges and fees, including a cap on storage fees for a repossessed vehicle, but it does not create a cure right or require advance notice before repossession. Michigan's consumer protection here runs through a different mechanism: repossession itself counts as collection agency activity under Michigan law. MCL 339.901(1)(b) defines a collection agency to include a person repossessing or attempting to repossess something of value owed under an agreement, and MCL 339.904(1) requires a license for each place of business conducting that activity, with a narrow exception for interstate communications only. Repossessing without the required license is a violation of Michigan's Occupational Code, a real angle if you believe the repossession itself was handled by an unlicensed operator.

Deficiency judgments after a repossession sale follow Michigan's standard UCC Article 9 disposition rules, requiring a commercially reasonable sale before any remaining balance can be pursued.

Servicemembers get one further protection: for a vehicle financed before military service, the federal Servicemembers Civil Relief Act (50 U.S.C. 3952) requires a court order before repossession.

If You Are Being Garnished or Sued in Michigan

Move in this order. First, if you are served with a lawsuit, file an answer before the deadline, even a bare general denial, because a default judgment forfeits every defense you had, including the statute of limitations. Second, if a garnishment is already running, check the math against the federal 25 percent and $217.50-a-week formula, and check whether the funds involved come from an exempt source like Social Security. Third, if the debt is old, raise the statute of limitations yourself, and be cautious about any payment or written acknowledgment, since a signed writing can revive it. Finally, if the overall debt picture is unmanageable, bankruptcy's automatic stay stops most garnishments and collection lawsuits while the case is pending.

Information last verified on 2026-08-12. This article has not yet been reviewed by a licensed lawyer.

Related Resources

• Debt Collection Laws by State
• Statute of Limitations on Debt
• How to Stop Wage Garnishment
• Car Repossession Laws
• Can Social Security Be Garnished?
• Michigan Statute of Limitations
• Michigan Bankruptcy

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Last updated: 2026-08-12.

More Michigan Laws

• Michigan Final Paycheck Laws
• Michigan Statute of Limitations
• Michigan Unclaimed Property

Frequently Asked Questions

How much of my paycheck can be garnished in Michigan?

Michigan has no state formula of its own, so the federal Consumer Credit Protection Act applies: the lesser of 25 percent of disposable earnings or the amount above 30 times the federal minimum wage, currently $217.50 a week.

Does Michigan have a head-of-household wage exemption?

No functioning one. A cross-reference in MCL 600.4031(2)(b) points to a section, MCL 600.7511, that does not exist in current Michigan law, so no head-of-household wage exemption is currently available under that provision.

What is the statute of limitations on credit card debt in Michigan?

Six years, whether the debt is classified as a contract claim under MCL 600.5807(9) or under the residual period of MCL 600.5813, since both land at 6 years.

What happens if I dispute a debt in writing in Michigan?

If you dispute the debt in writing within 30 days after receiving the validation notice, the collector must stop collecting the debt, or the disputed portion of it, until it obtains verification and mails a copy to you. That is the rule under both 15 U.S.C. 1692g(b) and MCL 339.918(2). It pauses collection; it is not a rule about what appears on your credit report.

Can a collection agency call me at 10 p.m. in Michigan?

No. MCL 339.915(n) requires that all communications be made from 8 a.m. to 9 p.m. unless you expressly agree in writing to another time, and it presumes that a call made between 9 p.m. and 8 a.m. was made at an inconvenient time. A violation of that article supports a private action under MCL 339.916.

Does making a payment restart the clock on old debt in Michigan?

Michigan requires a signed writing to revive a time-barred debt under MCL 600.5866. Whether a payment alone can count as an acknowledgment sufficient to revive the debt is not clear from the statute's text and depends on case law; do not assume a payment is safe.

Can I be fired for a wage garnishment in Michigan?

No. MCL 600.4015 bars an employer from disciplining or discharging an employee because of one or more garnishment actions, broader than the federal rule, which protects only the first debt. A wrongfully discharged employee is entitled to reinstatement and lost pay.

Does a repo company need a license to repossess my car in Michigan?

Yes. Michigan law treats repossession as collection agency activity, and MCL 339.904 requires a license for each place of business conducting it. Repossessing without the required license is an Occupational Code violation.