Michigan debt collection licensing laws

Michigan licenses collection agencies through the Department of Licensing and Regulatory Affairs framework under the Occupational Code's collection practices article (MCL Section 339.901), with a $10,000 surety bond. Michigan also regulates conduct through the Regulation of Collection Practices Act, which applies to regulated persons beyond licensed agencies, so the Michigan compliance file has both a licensing layer and a conduct layer.

Michigan's limitations period for most contract debt is six years under MCL Section 600.5807. Michigan courts treat a partial payment as capable of restarting the period, which is the opposite of the revival bar states like Texas have adopted, so payment-plan design on aged Michigan accounts has limitations consequences that the policy set should address explicitly.

Michigan classification: debt adjuster / debt management license state, under the Debt Management Act, MCL 451.411 et seq.. The relevant authority is the Michigan Department of Insurance and Financial Services. Michigan licenses debt management; whether a settlement-only model falls inside the definition turns on how the program touches consumer funds.

Michigan's Debt Management Act (MCL 451.411 et seq.), administered by DIFS, licenses debt management, and the analysis for a settlement-only model turns on whether the program receives or holds consumer funds or otherwise acts within the Act's definition. That threshold question is worth resolving with counsel before enrolling Michigan consumers, because the answer decides whether a license application comes first.

Programs that do handle Michigan consumer funds should assume the licensing layer applies. Whatever the state regime, the FTC's Telemarketing Sales Rule bars charging advance fees for debt settlement services marketed through telemarketing, so the federal fee-timing rules apply on top of any state license.