Michigan: Credit, Debt & Bankruptcy

Federal laws like the FDCPA and FCRA set a floor in every state. But the details that decide real cases in Michigan come from the Michigan Compiled Laws and Michigan courts. That includes how many days there are to answer a lawsuit, how a garnishment can be challenged, and which set of bankruptcy exemptions a filer uses.

Michigan differs from most of its neighbors in two ways. Its bankruptcy filers can choose between the federal exemption list and the state one. And its credit repair law has no registration and no bond, because it bans advance fees outright.

Your official Michigan resources

These are the state-level starting points most Michigan residents dealing with debt need:

• Michigan Attorney General — File a Complaint — the state complaint portal for consumer disputes, with online, mail, fax, and phone options.
• Michigan Legal Help — the statewide self-help site supported by the Michigan State Bar Foundation and the Michigan Supreme Court, with do-it-yourself tools for a civil answer and a garnishment objection, in English and Spanish.
• Guide to Legal Help — Michigan Legal Help's intake tool that matches an address and situation to legal aid offices and self-help centers.
• U.S. Bankruptcy Courts — Michigan has two federal districts: Eastern (Detroit, Flint, Bay City) and Western (Grand Rapids, Kalamazoo, Lansing, Marquette, Traverse City).

If you need	Official starting point
To respond to a debt lawsuit	Michigan Legal Help
To report a collector or scam	Attorney General complaint portal
To object to a garnishment	Michigan Legal Help garnishment tools
Bankruptcy forms and local rules	Your district's bankruptcy court site

Debt lawsuits in Michigan

A Michigan collection case starts when the creditor files a complaint and the court issues a summons. Michigan Legal Help states the response windows directly: 21 days to respond to a complaint handed to a person, and 28 days if the complaint arrived in the mail or the person was served outside Michigan.

An answer in Michigan is written paragraph by paragraph. Michigan Legal Help explains that each numbered paragraph of the complaint gets one of three responses: agree, disagree, or do not know. It also flags a Michigan-specific step: when the suit is on an account stated or an open account, a notarized Defendant's Counter Affidavit generally has to be filed with the answer.

Defenses have to be listed in the answer under their own heading, with supporting facts, because Michigan Legal Help warns that defenses not raised there cannot be raised later. Missing the window entirely lets the creditor win by default without proving anything.

A good starting point is what to do when you're sued for a debt and the debt lawsuit response checklist. Michigan Legal Help also publishes a Do-It-Yourself Civil Answer tool.

Statute of limitations basics

Michigan's contract deadline is in MCL 600.5807, which was reorganized by Act 15 of 2018, effective May 7, 2018. Subsection (1) says an action to recover damages or money due for breach of contract has to be commenced within the period the section prescribes, counting from when the claim first accrued.

Subsection (9) is the catch-all that covers most consumer debt: the period of limitations is 6 years for an action to recover damages or money due for breach of contract that is not described in subsections (2) through (8). Those other subsections cover narrower things like public officer bonds, covenants in deeds and mortgages, appeal bonds, and public obligations.

Because the accrual date does the real work, the dates on old statements matter more than the label on the account. Read how the statute of limitations on debt works before deciding anything about an old balance.

Wage garnishment and protected income

Michigan garnishment runs on a sequence of short clocks, and Michigan Legal Help lays them out. A creditor has to wait 21 days after the judgment is entered before it can get a writ of garnishment, so paying the judgment inside those 21 days prevents the garnishment entirely.

Once the court issues the writ, the creditor serves it on the garnishee, which is usually the employer or the bank. The garnishee then has 7 days to serve a copy on the person being garnished and 14 days to send a garnishee disclosure to the court, the creditor, and the debtor. The garnishee holds the money for 28 days, which is the window for an objection.

The objection deadline is short: Michigan Legal Help says a person has 14 days from getting the notice to file an Objection to Garnishment, and that filing one costs nothing. Grounds are limited, and they include that the money is exempt by law, that the maximum has already been withheld under another order, or that the garnishment was not properly issued.

On amounts, Michigan tracks the federal ceiling. Michigan Legal Help states that a creditor can garnish whichever is less, up to 25 percent of disposable earnings or the amount of disposable earnings above 30 times the federal minimum wage, which it lists as $217.50. That matches the Department of Labor's Fact Sheet #30. Support orders reach further, up to 50 percent, or 60 percent when the person is not supporting other children at home. Michigan Legal Help also notes it is illegal in Michigan for an employer to fire or punish someone because of a garnishment.

One more Michigan wrinkle: a periodic writ against earnings does not expire until the judgment, interest, and costs are paid. Our wage garnishment guide covers the federal baseline and how exemption claims generally work.

Bankruptcy in Michigan

Bankruptcy is federal, but it runs through local courts. Which of Michigan's two districts handles a case depends on where the filer lives. Each district posts local rules, forms, filing locations, and self-representation information: Eastern and Western. The Eastern District runs a pro se law clerk's office, a pro se electronic document upload program, and a pro bono program.

Michigan is one of the states that did not opt out of the federal exemption list. MCL 600.5451(1) says a debtor in bankruptcy may exempt property that is exempt under federal law, or, in the alternative, the property listed in the Michigan statute. That choice is a real strategic decision, and which set fits depends on the specific property involved.

The Michigan list covers a homestead exemption that is larger when the debtor or a dependent is 65 or older or disabled, a motor vehicle, household goods with per-item and aggregate caps, tools of the trade, retirement accounts, and entireties property held by spouses, except against joint debts.

Here is the part that trips up static articles: the dollar figures printed in MCL 600.5451 are base amounts. Subsection (4) directs the State Treasurer to adjust every amount for inflation every three years, round to the nearest $25, and publish the result, which applies to cases filed on or after the following April 1. This page does not print those figures. The current ones appear on the Michigan Department of Treasury's Bankruptcy Notices page.

For the big picture, start with our bankruptcy hub, the guide to Chapter 7, and filing without a lawyer. If bankruptcy is one of several options, debt relief compares them.

Free and low-cost legal help

Many Michigan residents qualify for free help and never use it. Michigan Legal Help hosts do-it-yourself tools that draft a civil answer or a garnishment objection, a full Spanish-language site, and a Guide to Legal Help that matches an address to legal aid offices and self-help centers. Nationally, the LSC legal aid finder covers every state.

Common mistakes to avoid

• ✕Using the wrong answer deadline. Michigan gives 21 days when the complaint was handed to you in person and 28 days when it came by mail or you were served outside Michigan.
• ✕Leaving defenses out of the answer. Michigan Legal Help warns that defenses you do not raise in your Answer cannot be brought up later in the case.
• ✕Forgetting the Defendant's Counter Affidavit. On an account stated or open account claim, that notarized form generally has to be filed along with the answer.
• ✕Missing the 14-day garnishment objection window. Filing an Objection to Garnishment costs nothing, and the garnishee only holds the money for 28 days.
• ✕Assuming a printed Michigan exemption figure is current. MCL 600.5451(4) has the State Treasurer re-adjust every dollar amount for inflation on a three-year cycle.
• ✕Paying a credit repair company up front. Michigan law bars charging anything before the agreed services are complete, with no bond that buys an exception.

Credit repair companies in Michigan: registration, bond, and how to check

Michigan handles credit repair through the Credit Services Protection Act, Act 160 of 1994, at MCL 445.1821 through 445.1826. The act has six sections: short title, definitions, prohibited conduct, actions, penalties, and a repealer. There is no registration section and no bond section, so there is no Michigan registry to search and no bond to claim against.

What Michigan does instead is remove the advance-fee business model. MCL 445.1823 bars a credit services organization from charging or receiving anything from a buyer seeking a loan before that loan closes, and from charging or receiving anything from a buyer of services before completing performance of all the services it agreed to perform. Other states let a surety bond unlock advance fees. Michigan does not.

The same section also bars helping a buyer remove accurate, non-obsolete adverse information, bars building a new credit record under a different name or Social Security number, bars filing a dispute without the buyer's knowledge, and requires the agreed services within 90 days unless a cancelable ongoing-services agreement applies.

Enforcement has teeth. MCL 445.1825 makes a violation a misdemeanor punishable by up to 90 days, a fine of up to $1,000, or both, treats each transaction as a separate offense, and bars a violating company from recovering any fees. MCL 445.1824 lets the Attorney General, a county prosecutor, or the buyer sue for an injunction or for damages of at least what the buyer paid, plus attorney fees and costs, within four years of the contract.

How to check a company: with no state registry, the useful test is the offer itself. A Michigan company asking for money before the work is done is describing conduct the statute prohibits. Then search the CFPB complaint database.

How to complain: the Michigan Attorney General's complaint portal and the CFPB.

The federal floor everywhere: the Credit Repair Organizations Act (15 U.S.C. §1679) bans advance fees, requires a written contract, and gives a three-business-day right to cancel. Accurate, timely items cannot be removed by anyone. How to vet an offer is on credit repair services.

Finding a bankruptcy attorney in Michigan

Michigan has two federal bankruptcy districts — Eastern and Western — and a case is filed in the one serving the county where the filer lives. The Eastern District posts a finding-an-attorney-and-legal-aid section and runs a pro bono program; the Western District publishes a find-an-attorney page and a legal assistance flyer.

The State Bar of Michigan Lawyer Referral Service is the statewide referral line, and Michigan Legal Help maintains its own find-a-lawyer directory alongside its Guide to Legal Help intake tool.

If income is limited, the LSC legal aid locator finds the federally funded program for any Michigan address, and the NACBA member directory lists consumer bankruptcy attorneys by ZIP code. The ordered path, what a consultation costs, and the questions to ask before paying are on how to find a bankruptcy attorney near you.

Frequently asked questions

How long do I have to respond to a debt lawsuit in Michigan?

Michigan Legal Help states two windows: 21 days to respond to a complaint that was handed to you in person, and 28 days if the complaint came in the mail or you were served outside Michigan. Not responding in time means the court will not require the creditor to prove anything, and the creditor wins by default.

What is Michigan's statute of limitations on credit card debt?

MCL 600.5807(9) sets a six-year period for an action to recover damages or money due for breach of contract that is not described in the section's narrower subsections, which is the catch-all most consumer debt falls into. The section was reorganized by Act 15 of 2018, effective May 7, 2018, and the clock runs from when the claim first accrued.

How much of my paycheck can be garnished in Michigan?

Michigan Legal Help states that a creditor can garnish whichever is less, up to 25 percent of disposable earnings or the amount of disposable earnings above 30 times the federal minimum wage, which it lists as $217.50. That matches the federal ceiling in the Department of Labor's Fact Sheet #30. Support orders can reach 50 percent, or 60 percent when the person is not supporting other children at home.

How do I object to a garnishment in Michigan?

Michigan Legal Help says a person has 14 days from receiving the notice to file an Objection to Garnishment, that filing one costs nothing, and that the garnishee holds the money for 28 days so there is time to object. The grounds are limited: that the money is exempt by law, that the maximum is already being withheld under another order, or that the garnishment was not properly issued.

Can I stop a Michigan garnishment before it starts?

Michigan Legal Help explains that a creditor has to wait 21 days after the judgment is entered before it can get a writ, so paying inside that window prevents the garnishment. Other listed options include a written payment plan or a motion for installment payments, which stops periodic wage garnishment but not a bank or tax refund garnishment.

Can Michigan bankruptcy filers use the federal exemptions?

Yes. MCL 600.5451(1) says a debtor in bankruptcy may exempt property that is exempt under federal law or, in the alternative, the property listed in the Michigan statute. That makes Michigan different from states that opted out, and which set fits better depends on the specific property involved.

Why does this page not list Michigan's exemption dollar amounts?

Because the figures printed in the statute are base amounts, not current ones. MCL 600.5451(4) directs the State Treasurer to adjust every dollar amount in the section for inflation every three years, round to the nearest $25, and publish the result, which applies to cases filed on or after the following April 1. The current figures are published by the Michigan Department of Treasury on its Bankruptcy Notices page.

Can my employer fire me over a garnishment in Michigan?

Michigan Legal Help states that in Michigan it is illegal for an employer to fire you or punish you in any way because of a garnishment, and that an employer must start withholding for the first full pay period after receiving the notice. Federal law adds a parallel protection for a single debt.

Do credit repair companies have to be registered in Michigan?

No. The Michigan Credit Services Protection Act, MCL 445.1821 to 445.1826, has no registration and no bonding requirement, so there is no state registry to search. Instead MCL 445.1823 bars charging anything before all agreed services are complete, with no bond exception, and MCL 445.1825 makes a violation a misdemeanor punishable by up to 90 days or up to $1,000, and bars the company from recovering any fees.

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