Michigan Statute of Limitations on Debt

Edited by Hannah Locklear

Debt collectors employ various tactics to recover what you supposedly owe them. Such measures include lawsuits, frequent calls, emails, and letters, which can be frustrating to deal with.

As a resident of Michigan, it's essential to understand that you have rights and options for resolving your debt problems. Michigan has several laws that protect debtors and govern how debt collectors operate.

When creditors decide to initiate a lawsuit against you, it's always advisable to find out if the lawsuit is valid or time-barred before filing a response to the court. If a collection suit is time-barred, it means that the statute of limitations has passed, and the creditor has no right to initiate legal action against you.

Make the right defense the right way and win your case.

What is the Michigan statute of limitations on debt?

For some reason, some creditors may knowingly pursue an old, time-barred debt. In such a case, you can use the statute of limitations as your defense.

In Michigan, the statute of limitations is set to six years for most types of debts and contracts.

Michigan Statute of Limitations on Debt
Debt Type	Deadline in Years
Rent	6
Written	6
Oral	6
Debt on Account	6
Judgments	10 (of record), 6 (not of record)
Source: Findlaw

Types of contracts covered by the six-year statute of limitations include:

• Oral contracts
• Written contracts
• Open-ended credit accounts
• Promissory notes

This means that if your debt has gone unpaid for more than six years, debt collectors can't take legal action against you. But this doesn't mean creditors can't resort to other debt collection measures such as calling you, sending emails, or providing this information to credit bureaus. However, they can't seek a court judgment against you.

Michigan sales contract explained

In Michigan, there's a special kind of contract called a sales contract with a four-year statute of limitations. This type of contract involves the debtor securing money to purchase a particular product. The product purchased is then used as collateral for the loan. In that case, the creditor has only four years after the debtor defaults to seek legal action.

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What can restart the statute of limitations?

The statute of limitations in Michigan can be restarted through the following scenarios:

The creditor winning a judgment against the debtor

It's important to note that the statute of limitations doesn't apply if the creditor gets a judgment or default judgment against you. So if the creditor goes to court and wins a judgment against you, the judgment carries a statute of limitations of ten years.

Michigan law allows a creditor to employ debt collection measures such as wage garnishment almost indefinitely as long as they keep the attachment or lien alive by renewing the judgment every decade.

To avoid this, ensure you file a response to the court as soon as you receive a collection suit from the plaintiff, even if the statute of limitations has expired. Failure to do so, the creditor may ask the court to enter a default judgment against you because you failed to appear in court or defend yourself.

A debtor making a partial payment

Making a partial payment of the debt is another way to reset the statute of limitations in Michigan. However, if the creditor had won a judgment against you, making partial payments doesn't affect the judgment's statute of limitations of ten years. For this reason, it's not advisable to make any partial debt repayment unless you're willing to pay the debt in full.

The debtor acknowledging ownership of the debt

Some creditors may contact you after the statute of limitations has run out and try to trick you into acknowledging you owe them a debt. If the debt is a qualifying debt, e.g., a credit card debt, the statute of limitations will reset immediately after you acknowledge ownership of the debt.

For this reason, never acknowledge that you owe any debt to a creditor. If you receive a call from a creditor asking you to acknowledge a debt, ask them to send paperwork detailing the debt they claim you owe. If the debt's statute of limitations has expired, you can send a cease and desist letter to the debt collectors.

When does the statute of limitations begin?

Contrary to popular opinion, the statute of limitation doesn't commence the day the consumer takes the debt. Instead, it begins when the debt was last serviced or the date the debtor breached the contract terms.

For instance, if you stopped making credit card payments in 2020, the creditor has until 2026 to seek legal action against you. If you pay part of the debt in 2024, the statute of limitations would reset, and the creditor will have another six years to pursue the debt in court.

For that reason, if you have an out-of-court agreement with the creditor to pay less than the total amount of debt, ensure you obtain a signed letter from them indicating that you're paying part of the loan in exchange for debt forgiveness.

If you fail to do so, the creditor may turn against you and claim that the payment made was a partial debt payment. In such a case, the statute of limitations will reset, and the creditor can file a collection suit against you to recover the remaining amount.

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What to do if a lawsuit is filed against you after the statute of limitations expires

If the plaintiff serves you with a notice of complaint on a debt that you believe is past the statute of limitations, you'll still need to file an answer to the court. You'll use the statute of limitations as an affirmative defense to prevent the creditor from taking further action against you.

Filing an answer to the court may not be a straightforward process, especially if it's your first time receiving a notice of complaint. If you don't know how to file an answer to the court, SoloSuit can help you do it without much hassle. You'll only need to answer a few simple questions about the case, and the software will prepare a response for you in no time.

Then, you can either print the Answer form and file it yourself or have one of SoloSuit's attorneys review it then file it for you at a small fee.

It's always advisable not to ignore a notice of complaint because the creditor can obtain a deficiency judgment against you and renew their collection efforts even if the statute of limitations has expired. Furthermore, they can keep renewing the deficiency judgment until the debt is paid in full.

What is SoloSuit?

SoloSuit makes it easy to respond to a debt collection lawsuit.

How it works: SoloSuit is a step-by-step web-app that asks you all the necessary questions to complete your answer. Upon completion, you can either print the completed forms and mail in the hard copies to the courts or you can pay SoloSuit to file it for you and to have an attorney review the document.

>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate

>>Read the NPR story on SoloSuit: A Student Solution To Give Utah Debtors A Fighting Chance

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All 50 states.

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