How Long Can You Be Sued for a Debt in Michigan?

When a Michigander incurs a debt, he is legally obligated to make good on it. According to Michigan law, however, if enough time elapses, then he is no longer legally obligated to pay. This time limit is know as the statute of limitations.

After this time has passed, the creditor can no longer attempt to collect on the debt without facing penalties. In Michigan, the statute of limitations for most debts is ​six years​.

Open Account/Written Contract

According to Michigan law, all debts derived from open accounts, such as lines of credit, and written contracts, such as documented loans, can be collected for a maximum of only ​six years. So if you have credit card bills that have not been collected after six years, the card company cannot come after you for the debt.

This statute of limitations applies both to the collection of money and the filing of any civil lawsuit seeking damages for breach of contract. After this period has expired, a creditor cannot bring a lawsuit against the individual or collect on the contract.

Secured Sales Contracts

A sales contract is a special kind of contract related to the sale of a particular good. In many cases, a loan is secured by collateral. For example, when a loan is used to purchase a car or a house, the object being purchased is often used as collateral on the loan.

In these types of contracts, in which the money is secured by a purchase, the creditor can seek payment on the debt for only ​four years in Michigan. After that the debt is time-barred, which means you can pay the money back voluntarily but no one can sue you for it.

Rules for Judgment Debt

While a creditor can only collect on a debt for up to six years, if he sues the debtor and receives a civil judgment ordering the debtor to pay the debt, then he can collect for an additional ​10 years​. In addition, in some cases, the creditor can apply to have this statute of limitations on the judgment extended. This statute of limitations applies equally to both foreign debts and domestic ones.

When the Clock Starts Ticking

It is a common misconception that the period at which the statute of limitations commences is the time at which the debt was taken out. In fact, it is the moment at which the debt was last serviced.

So, if an individual stopped paying money owed on a written contract in 2020, the debt could be collected until 2026. If, however, the borrower suddenly made another payment in 2021, the statute of limitations would reset and collections could occur until 2027.

This is important if you make a settlement arrangement where some of the debt is written off and you pay less than you owe, or the repayments are spread over a longer period of time time. In this situation, you should ask the creditor to write a letter confirming that the debt is being settled under the new arrangements. This will effectively stop the clock on collections.