Medical Debt Collection Agency in Michigan

State-Specific Laws

Statute of limitations: Six years on written or oral contracts, including most medical bills (MCL 600.5807). Partial payment or a new written promise restarts the clock. Surprise Medical Billing Laws (Public Acts 234 and 235 of 2020): A nonparticipating provider covered by these laws may not collect from the patient more than the in-network coinsurance, copayment, or deductible, including while it arbitrates payment with the insurer. Non-profit charity-care: Hospitals must publicize financial-assistance policies and wait at least 120 days before extraordinary hospital debt collection, mirroring IRS 501(r).

HIPAA & Breach-Notification Requirements

MSB receives PHI by encrypted file transfer (SFTP) and handles it under its HIPAA compliance program.

State Licensing & MCPA

Michigan’s Occupational Code (MCL 339.901 et seq.) requires a state license and up to a $50k surety bond for agencies. The MCPA (MCL 445.251 et seq.) bans harassment and misrepresentation, and applies to healthcare creditors. MSB is licensed where required (NMLS 2671949).

Medical Debt and Credit Reporting

Whether a medical balance can affect credit depends on its reporting eligibility and applicable law. The three nationwide credit bureaus exclude paid medical collections and medical collections with an initial reported balance under $500, and use a one-year waiting period for unpaid medical collections. These are bureau policies, not permission to report a balance prohibited by law. The CFPB’s January 2025 medical-debt credit-reporting rule was vacated by a federal court on July 11, 2025. It does not establish a nationwide reporting ban. Any reporting must satisfy applicable federal and state law and the receiving credit bureau’s policies; client permission alone is not enough.

• TransUnion: current medical-collection reporting policies
• CFPB: July 11, 2025 court decision

Michigan Medical Debt Collection Laws & Regulations

Michigan has enacted specific collection practices legislation and consumer protection laws that govern how medical debt may be collected within the state. Michigan applies a 6-year statute of limitations for written and oral contracts (MCL §600.5807). Medical debt based on signed patient financial agreements falls under this 6-year period, running from the date of default. Once the statute expires, collectors can no longer pursue legal remedies to recover the debt.

State Licensing Requirements

Collection agencies in Michigan must be licensed through the Michigan Department of Licensing and Regulatory Affairs (LARA) under Article 9 of the Occupational Code (MCL §339.901 et seq.). Licensing requires a surety bond, background checks, and compliance with operational standards. Agencies must renew their licenses every three years and are subject to LARA examinations. MSB is licensed where required (NMLS 2671949).

Wage Garnishment Rules

Michigan limits wage garnishment to 25% of disposable earnings or the amount by which disposable earnings exceed 30 times the federal minimum wage, whichever is less (15 U.S.C. § 1673). Michigan also provides additional protections through installment payment orders, which allow debtors to propose reasonable payment plans as an alternative to garnishment.

Key Consumer Protection Laws

Michigan Occupational Code, Article 9 (MCL §339.901): Establishes licensing, bonding, and operational requirements for collection agencies. Prohibits harassment, threats, and deceptive practices. Agencies must maintain trust accounts for collected funds and comply with LARA examination requirements. Michigan Consumer Protection Act: Provides broad protections against unfair, deceptive, and unconscionable trade practices, with applicability to debt collection activities. Michigan Regulation of Collection Practices Act: Complements the federal FDCPA with state-specific prohibitions, including restrictions on misrepresentation and unfair collection methods. Hospital Financial Assistance: Michigan nonprofit hospitals must maintain financial assistance policies and provide notice of available programs before initiating aggressive collection activity.

How MSB Handles Compliance in Michigan

MSB is licensed where required (NMLS 2671949). All collectors assigned to Michigan accounts receive training on the state’s Collection Practices Act, garnishment procedures, and installment payment order rules. Our compliance team monitors Michigan regulatory changes.