Michigan consumers enjoy protection from unscrupulous third party debt collectors because of two landmark laws. The United State Congress passed the Fair Debt Collection Practices Act (FDCPA) in 1977.
Written to prevent debt collectors from abusing and threatening consumers, the FDCPA has acted as the model legislation states have referred to when drafting debt collection laws.
Michigan debt collection law covers debt collectors, such as agencies, while excluding banks, law firms, and lending institutions. If Medical Financial Solutions has contacted you in regards to an outstanding debt, you should consult with a licensed consumer protection attorney who has experience litigating cases involving the Michigan Fair Debt Collection Practices Act (MFDCPA).
Debt Collection Statute of Limitations in Michigan
Michigan consumers should know that under the MFDCPA, debt collectors do not have an unlimited amount of time to collect delinquent debts. In fact, Michigan law gives third party debt collectors up to six years to file judgments against consumers.
The six year statute of limitations for requesting judgments starts on the date a consumer last made a payment on a credit account. After gaining approval of a judgment, a debt collector has the legal right to pursue the collection of a debt as long as a judgment is valid.
Michigan law requires debt collectors to renew judgments every 10 years.
How Does the MFDCPA Address Fees and Interest?
Consumers that do not pay off original creditors in a timely manner can expect original creditors to add late payment fees and other surcharges to monthly bills. What happens when original creditors sell consumer debts to third party debt collectors?
Can debt collectors also add fees and interest charges to accounts sold by original creditors? Michigan law prohibits third party debt collectors from including additional fees and interest charges on delinquent consumer debt balances.
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What Michigan Consumers Need to Know about Wage Garnishment
The primary reason debt collectors seek to win judgments against Michigan consumers is to receive the legal green right to garnish wages to pay off delinquent debts. However, Michigan law limits the amount of wages third party debt collectors can garnish.
After winning a judgment against you, a debt collector must follow a simple formula. The agency or law firm can garnish only 25% of your disposable income or the amount of 30 times the federal minimum wage, whichever is lower.
For example, let’s assume the minimum wage is $8 an hour and your weekly disposable income is $800. A debt collector can garnish $200 of your disposable income.
Seek the Advice of a FDCPA Attorney
If you believe a third party debt collector has violated one or more provisions of the FDCPA and/or MFDCPA, you should seek the advice of a licensed Michigan consumer protection law attorney. A licensed attorney understands every legal provision written into both consumer protection laws.
Your attorney will prevent an unethical debt collector imposing unlawful fees, as well as ensuring you remain protected under Michigan wage garnishment law.
Additional Resources
*Disclaimer: The content of this article serves only to provide information and should not be constructed as legal advice. If you file a claim against Medical Financial Solutions or any other third-party collection agency, you may not be entitled to any compensation.