If you default on your credit card debt, your creditor reserves the right to sue you—but only for a limited time. Michigan's statute of limitations for debt collection helps protect its residents from lawsuits over painfully old debts.
Statute of Limitations
For Michigan residents, the statute of limitations for defaulted credit card debt is six years. Your credit card company and any collection agencies it hires can sue you at any time during the six years following your default.
There are two major exceptions to the six-year rule in Michigan: federal tax debt and federal student loan debt. Debts you owe to the IRS have a ten-year statute of limitations regardless of your state, while federal student loans lack a statute of limitations altogether.
An expired statute of limitations doesn't guarantee that your credit card company or a debt collector won't sue you. It merely provides you with a tool you can use to protect yourself in the event a lawsuit takes place. If you receive a court summons notifying you of an out-of-statute lawsuit for your unpaid credit card debt, you must respond to the summons and note the fact that the statute of limitations on the debt has expired. If you do not cite this fact or do not respond at all, the court will allow the creditor to proceed and likely will award it a judgment against you.
If your creditor files a lawsuit against you and wins, it receives a civil judgment from the court. In Michigan, a creditor with a civil judgment can take more stringent collection methods to recover the debt, such as garnishing your wages, freezing your bank accounts and attaching liens to your property.
Michigan has a separate statute of limitations in place for judgments. A creditor with a judgment has ten years to enforce its claim before the judgment becomes invalid. Michigan law, however, allows creditors to renew unpaid judgments for an additional ten-year period.
Unfortunately, the statute of limitations isn't set in stone. There are actions you can take that will “restart the clock” and provide your creditors with additional time in which to sue you. In most states, simply making a payment restarts the statute of limitations. In Michigan, however, you must provide the credit card company or collection agency with a written promise to pay the debt before the statute of limitations begins anew.
- Acclaim Legal Services PLLC: Statute of Limitations for Debt Collection in Michigan
- Nolo: Time Limits on IRS Collections
- American Bar Association: Collecting Time-Barred Debt—Is It Worth the Risk?
- Lee Edwards; The Credit Repair Network; Phoenix, Arizona
Ciele Edwards holds a Bachelor of Arts in English and has been a consumer advocate and credit specialist for more than 10 years. She currently works in the real-estate industry as a consumer credit and debt specialist. Edwards has experience working with collections, liens, judgments, bankruptcies, loans and credit law.