How to Collect a Debt in Michigan

You may need to take a debtor to court in order to obtain the money owed to you.

Collecting an unpaid debt, whether personal or business-related, can be difficult if you have an uncooperative debtor. There are several things you can do to remedy the situation in Michigan, as long as you abide by Michigan's Revised Judicature Act of 1961 and the Fair Debt Collection Practices Act (FDCPA) put in place by the Federal Trade Commission.

Instructions

1. Call the debtor and attempt to make payment arrangements for the debt owed. Remain calm and professional. Set a specific amount and a due date each month. Politely let the debtor know that failure to comply with the payment arrangements may result in further action through the Michigan court system.

2. Send the debtor a 'demand lette' upon failure to comply with payment arrangements. You must take this action in order to move forward with court proceedings. According to Section 809 of the FDCPA, the demand letter must include the amount of the debt owed, the original creditor, notice that the debtor has 30 days to request validation of or dispute the debt in writing, and that, should the debtor request validation of the debt within that 30 day time frame, you will provide the necessary documentation.

3. File a lawsuit in the Michigan county of the debtor's residence if there is no response to or viable solution from your demand letter. If the amount the debtor owes you is less than $3,000.00, then you can file the case in small claims court and won't need an attorney to represent you. If the debt exceeds that amount, then the case should be in the Michigan circuit court where legal representation is helpful.

4. Provide the court with all documentation in your possession validating the debt. Attend all court dates and hearings. Persistence and solid proof of your claim will likely cause the court to rule in your favor and issue judgment against the debtor.

5. Subpoena the debtor to attend a deposition, as per Act 236 Chapter 61, Section 600.6110 of the Michigan Revised Judicature Act of 1961, at a specific location in the debtor's county of residence on a specific date and time so that the debtor can testify, under oath, as to available assets. This is your means of obtaining information for collecting the judgment through court proceedings, such as garnishment of wages or levies on personal property.

6. Execute a garnishment on the debtor's wages or bank accounts per Act 236, Chapter 60 of the Michigan Revised Judicature Act of 1961. Seek legal counsel for assistance on this and other means of collecting the judgment through court proceedings.

Tips & Warnings

• Hiring a collection agency or Michigan attorney with collections experience may be a very valuable means of collecting the money owed to you, especially if your business has several outstanding invoices. These experts will make sure to complete the collection process correctly and legally.

• As discussed in Sections 805 and 806 of the Fair Debt Collection Practices Act, be sure that you refrain from harassing the debtor in order to obtain payment. Doing so is in violation of the FDCPA and can result in legal ramifications.

References

• Federal Trade Commission: Fair Debt Collection Practices Act
• Michigan Legislature: Revised Judicature Act of 1961 �?? Act 236, Documents 40, 60 and 61
• Michelle Cramer; 5 years experience as legal assistant specializing in debt collection; Columbia/Springfield, MO

Resources

• Michigan Courts: Small Claims Self Help