Michigan Statute of Limitations on Debt: A Guide for Consumers

Michigan Statute of Limitations on Debt, The statute of limitations for debt in Michigan varies depending on the type of debt. Written contracts, like credit cards or car loans, have a statute of limitations of 6 years. Oral contracts have a statute of limitations of 6 years as well. Judgments in Michigan expire after 10 years.

It’s important to understand the nuances of Michigan’s statute of limitations laws so you know your rights when dealing with debt collectors. This article will explain everything you need to know about Michigan’s statutes of limitations for different types of debts.

Written Contracts - 6 Years

In Michigan, the statute of limitations for written contracts is 6 years. This applies to common debts like:

Credit cards
Personal loans
Mortgages
Car loans
Medical debt

The clock starts ticking from the date of your last payment or last activity on the account. For example, if you stopped making payments on a credit card 6 years and 1 day ago, the creditor can no longer sue you to collect on that debt.

However, you need to be careful, as certain actions can “revive” the statute of limitations. If you make a payment, enter a payment plan, or even acknowledge that you owe the debt, it resets the 6-year period.

The creditor or collector may still attempt to collect on the debt even though the statute of limitations has expired. They just can’t take you to court. It’s illegal for them to threaten litigation on a time-barred debt.

Oral Contracts - 6 Years

Debts arising from oral contracts, like a verbal agreement or promise to pay, also have a 6-year statute of limitations in Michigan. However, these debts can be more difficult to prove in court since there’s no written contract.

As with written contracts, if you make a payment or acknowledge the oral debt in any way, it restarts the 6-year clock. Tread carefully when collectors call about these old oral debts.

Judgments - 10 Years

If a creditor sues you and wins a judgment, that judgment is valid in Michigan for 10 years. They can seize your assets or garnish wages to satisfy the judgment during this time.

Creditors can request to renew judgments beyond 10 years if the debt still hasn’t been paid. Therefore, a judgment isn’t necessarily gone after a decade. Still, Michigan’s 10-year limit does provide some protection.

Resolving Old Debt with Debt Settlement Companies

If you have debts in Michigan that are past the statute of limitations, the smartest approach is often to work with an experienced Michigan debt settlement company. Debt settlement provides a way to resolve old, unpayable debts while avoiding bankruptcy. The process involves:

Stopping payments to creditors and saving up lump sum amounts.
Having the debt settlement company negotiate reduced payoff amounts.
Paying the settled amounts from your lump sum savings.
Becoming debt-free in as little as 12-48 months.

On average, reputable debt settlement companies can settle statute-barred debts for 40-60% less than the original amount owed. This saves consumers significant money. The key is partnering with a debt settlement firm familiar with creditors and debt collection laws in Michigan. They will have the best results negotiating debt reductions on expired debts. Debt settlement is cheaper and faster than bankruptcy.

Moreover, it also keeps the debt defaults off your credit report rather than erasing your credit history entirely. This can help you rebuild credit faster. If you have old, unpayable debts in Michigan, debt settlement is often the smartest way to become debt-free without the risks and costs of bankruptcy. Partner with a reputable Michigan debt settlement company for the best outcome.

The statute of limitations on debt in Michigan can be confusing. But in summary, written and oral contracts have a 6-year limit, while judgments expire after 10 years. These laws are intended to protect consumers from lawsuits over aged debts. However, you still owe the debts even when the statutes of limitations run out. For resolving old, unpayable debts, debt settlement is often the most effective approach.

Working with an experienced Michigan debt settlement company can help you settle debts for a fraction of what you owe and avoid bankruptcy. Take control of your financial freedom by understanding your rights and leveraging debt settlement to address debts that are past the statute of limitations in Michigan. With the right help, you can overcome debt and move forward.

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At Second Start Financial, we are dedicated to helping you regain control of your life. Our mission is to provide you with effective debt relief solutions that address your unique financial situation. With a team of committed debt specialists, we work tirelessly to deliver the results you need to move forward with confidence.

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