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Statute of Limitations Michigan Debt: What You Need to Know
If you live in Michigan and have debt, it is essential to understand the state’s statute of limitations on debt collection. A statute of limitations is a legal time limit for creditors or debt collectors to sue you for an unpaid debt. After the statute of limitations has expired, the creditor or debt collector can no longer legally collect the debt. This article will cover everything you need to know about the statute of limitations on debt in Michigan.
What Is the Statute of Limitations on Debt in Michigan?
In Michigan, the statute of limitations on debt is six years. This means that creditors and debt collectors have six years from the date of your last payment or activity on the account to sue you for an unpaid debt. After the six-year period, the debt becomes time-barred, and the creditor or debt collector can no longer legally sue you for the debt.
It is important to note that the statute of limitations clock starts ticking from the date of your last payment or activity on the account. If you make a payment or any activity on the account during the six-year period, the statute of limitations clock resets, and the creditor or debt collector has six years from that date to sue you for the outstanding debt.
What Types of Debt Does the Statute of Limitations Cover?
The statute of limitations on debt in Michigan covers most types of debt, including:
1. Credit card debt
2. Personal loans
3. Medical bills
4. Utility bills
5. Auto loans
6. Payday loans
7. Student loans (Federal student loans have no statute of limitations)
8. Mortgages (Foreclosure can be initiated after the statute of limitations period expires)
Note: Debt from criminal activities, child support, and taxes is not covered by the statute of limitations.
What Happens If a Creditor or Debt Collector Sues You for the Debt After the Statute of Limitations Has Expired?
If a creditor or debt collector tries to sue you for a time-barred debt, you can raise the statute of limitations as a defense. You must appear in court and present evidence that the debt is time-barred, and the court will dismiss the case.
However, if you receive a summons, it is essential not to ignore it, as it can result in a default judgment against you. If you receive a summons for a time-barred debt, you can still appear in court and raise the statute of limitations as a defense.
What Are Your Options If a Debt Collector Harasses You for a Time-Barred Debt?
If a debt collector contacts you for a time-barred debt, you have two options:
1. Ask for Verification of the Debt: You have the right to ask the debt collector for verification of the debt. This request must be made within 30 days of the debt collector contacting you. Once you receive verification of the debt, you can determine if the debt is time-barred or not.
2. File a Complaint: If the debt collector continues to harass you for the time-barred debt, you can file a complaint with the Consumer Financial Protection Bureau (CFPB), the Federal Trade Commission (FTC), or the Michigan Attorney General’s Office.
FAQs
Q: Can the creditor or debt collector garnish my wages for a time-barred debt?
A: No. If the debt is time-barred, the creditor or debt collector cannot legally garnish your wages or place a lien on your property.
Q: How long does the statute of limitations last for open-ended accounts like credit cards?
A: The statute of limitations for open-ended accounts like credit cards starts from the date of your last payment or activity on the account.
Q: Can a debt collector threaten to sue me for a time-barred debt?
A: No. Debt collectors cannot threaten to sue you for a time-barred debt. It is an illegal debt collection practice.
Q: Can collectors still contact me about the debt after the statute of limitations has expired?
A: Yes. Collectors can contact you about the debt after the statute of limitations has expired, but they cannot sue you for the debt. However, if you do not want them to contact you, you can request them to cease and desist their communications.
Conclusion
Understanding the statute of limitations on debt in Michigan is crucial to protecting your rights. If you have a time-barred debt, you have options available to protect yourself from harassment and illegal debt collection practices. Always consult with an attorney if you are unsure about the legal implications of a time-barred debt.
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Article Summary:
Michigan has a six-year statute of limitations on debt collection where creditors or debt collectors have six years from the date of a debtor’s last payment or activity on the account to sue them for unpaid debt. After that period, the debt becomes time-barred, preventing legal collection of the debt. The statute of limitations on debt in Michigan covers most types of debt, except for debt from criminal activities, child support, and taxes. In the case of a time-barred debt, debtors can raise the statute of limitations as a defense in court and ask for verification of the debt or file a complaint with regulatory bodies.
