Collections Services

Many debtors live beyond their means or fail to respond to collections efforts. If you are a business or individual that needs to collect a debt, it may be necessary to file a lawsuit. In some cases, debtors ignore a complaint that is served on them, or they may fail to respond by the deadline. When this happens, you may be able to obtain a default judgment, which in turn permits you to take other steps to actually collect the money you are owed. At Neumann Law Group, our Detroit, Traverse City, and Grand Rapids collections lawyers can assist you in these efforts.

Both federal and state laws regulate debt collection. The federal Fair Debt Collection Practices Act is codified at 15 USC 1692. It provides consumers with rights to obtain validation of a debt and control the communications that debt collectors, including lawyers, can have with them. Michigan has two statutes, Article 9 of the Occupation Code and the Collection Practices Act, codified at MCL 445.251 et seq., which regulate fair debt collection. The latter law applies to banks, trust companies, savings and loan, abstract companies, and other regulated parties.

Most debt collection lawsuits allege a breach of contract. In Michigan, as a creditor, you have six years to bring a breach of contract lawsuit under MCL 600.5807. As noted above, there are instances in which a debtor fails to answer, and you may be able to obtain a default judgment. However, in other cases, a debtor retains an attorney to fight the lawsuit, and those cases tend to be more expensive. It can be a good idea to try to resolve a debt short of bringing litigation and reserve the lawsuit for instances in which the debt is large enough that it makes sense to spend money on litigation.

Many debtors do not pay even after a judgment has been entered against them. Once a judgment is entered for a creditor, it can be collected on for 10 years from the date judgment is entered. After obtaining a judgment, you will have to figure out which is the best technique to actually collect the debt. The unpaid judgment will continue to collect interest.

There are many different techniques that may be used for collections, including garnishing the debtor's wages, garnishing or seizing the debtor’s funds from a bank account, or placing a lien on personal or real property. In Michigan, federal law governs how much a creditor can garnish from wages in order to satisfy a debt. Specifically, after required deductions, you can take either 25 percent of a judgment debtor's net wages or the amount by which a debtor's weekly disposable incomes are more than 30 times the federal hourly minimum wages, whichever is less. This limit does not apply to certain types of debts.

You should be cognizant of the time limits imposed by law to collect a debt and retain an attorney early enough so that you can to try to resolve a debt informally first. If you are trying to recover a debt, you should contact the Detroit, Grand Rapids, and Traverse City collections attorneys at Neumann Law Group. Kelly Neumann has a firm understanding of appropriate collections tactics and how to collect a debt after obtaining a judgment so that you can recover what you are owed. We represent creditors in Petoskey, Warren, Holland, Midland, Muskegon, Saginaw, Wyoming, Kalamazoo, Lansing, Flint, and Ann Arbor, as well as communities throughout the Upper Peninsula. Contact us at 800-525-NEUMANN or via our online form for a consultation. We also can assist people who need an injury attorney or representation in a criminal defense, real estate, family law, estate planning, or mediation matter. In addition to Michigan, Neumann Law Group serves clients in California and Massachusetts.