Michigan Consumer-Debt Defense

Michigan Consumer-Debt Defense

NOT LEGAL ADVICE. This subject-matter bundle describes a procedural and substantive framework for Michigan consumer-debt cases, not legal advice and not strategic advice for any specific case. Outcomes are fact-specific; the choice of defenses, claims, motions, and discovery belongs to the litigant (and any counsel the litigant retains). Statute numbers, dollar thresholds, and day counts change — verify every citation against the current Michigan Compiled Laws (legislature.mi.gov) and the Michigan Court Rules before filing, and consult a licensed Michigan attorney.

Use this bundle when a Michigan consumer has been sued by a debt collector — typically a debt buyer (Midland Credit Management, Portfolio Recovery Associates, LVNV Funding, Jefferson Capital, Cavalry SPV, etc.) or a collection agency acting for an original creditor. The dominant forum is the District Court; see "Forum" below.

The Michigan consumer-debt landscape

Michigan layers a federal regime over a Michigan-specific one. A distinctive feature: Michigan has two state collection statutes that reach collectors differently — the Regulation of Collection Practices Act (RCPA), MCL 445.251 et seq., whose prohibited-acts section (MCL 445.252) binds a "regulated person" (defined at MCL 445.251(1)(g) to include first-party collectors such as an employee collecting for one employer in the employer's name, and chartered banks / savings-and-loans / credit unions collecting their own claims), making it broader than the FDCPA in that respect; and the Occupational Code, Article 9, MCL 339.901 et seq., which licenses third-party collection agencies and debt buyers through LARA and supplies the prohibited-practices / civil-liability rules for licensees.

Federal layer. FDCPA, 15 U.S.C. §§ 1692-1692p — the workhorse for debt-buyer defense and counterclaims; reaches third-party collectors and debt buyers, generally not original creditors. Regulation F, 12 C.F.R. pt. 1006 — CFPB rule implementing the FDCPA (eff. Nov. 30, 2021; call-frequency, validation-notice, time/place rules). FCRA, 15 U.S.C. §§ 1681 et seq. — furnisher / re-aging / dispute issues. Federal text lives in the shared corpus; cross-reference ../mi-law-references/references/federal-debt-laws/ (symlinked into claude-legal-federal-laws).

Michigan layer. RCPA — MCL 445.251 to 445.258 (prohibited practices § 445.252; damages § 445.257). Occupational Code Article 9 — MCL 339.901 et seq. (collection-agency definition, LARA licensure). MCPA — MCL 445.901 et seq., with the regulated-conduct exemption at MCL 445.904. Michigan UCC Article 9 — MCL 440.9101 et seq. (assignments / chain of title).

The RCPA — Michigan's broad first-party reach

The RCPA (MCL 445.251 et seq.) is the Michigan analog to the FDCPA, but its prohibited-acts section (MCL 445.252) binds a "regulated person" — defined at MCL 445.251(1)(g) as a person whose collection activities are confined and directly related to operating a business other than a collection agency, including a regular employee who collects for one employer in the employer's name, and state/federally chartered banks, savings-and-loans, and credit unions that collect their own claims. Because "regulated person" thus reaches first-party / in-house collectors, the RCPA can apply where the FDCPA generally does not. (Third-party collection agencies and debt buyers are instead governed by the Occupational Code Article 9 prohibited-practices rules — see below.)

• Prohibited practices — MCL 445.252 enumerates communicating in a misleading or deceptive manner, simulating judicial process, misrepresenting the legal status/rights/consequences of a debt, harassing or abusive collection methods (with the 8 a.m.–9 p.m. call-time rule), and the like. Map the collector's conduct to the specific subsection.
• Civil liability — MCL 445.257: an injured person "may bring an action for damages or other equitable relief" and recover actual damages or $50.00, whichever is greater. For a willful violation the court may assess a civil fine of not less than 3 times the actual damages, or $150.00, whichever is greater, and shall award reasonable attorney's fees and court costs to a prevailing petitioner. (Verify the current figures and the willfulness standard.)

The treble-plus-mandatory-fees structure makes a well-founded RCPA counterclaim a real settlement lever. The Occupational Code (below) is the parallel regime for licensed third-party collectors; the two overlap and one course of conduct can implicate both — identify which actor is which.

Occupational Code Article 9 — the licensing defense

MCL 339.901 et seq. licenses collection agencies (defined at MCL 339.901 to include a person "directly engaged in collecting or attempting to collect a claim owed or due or asserted to be owed or due another," and persons furnishing collection forms/systems). A debt buyer collecting on purchased accounts is generally acting as a collection agency for licensing purposes — confirm against the current definition.

• Licensure through LARA — a third-party collection agency / debt buyer must hold a Michigan collection-agency license. Check the LARA licensee lookup for the plaintiff and its servicer.
• Licensing as a defense / pressure point — an unlicensed collector or debt buyer violates Article 9. Whether that voids the debt or only exposes the collector to penalties / an unfair-practice theory is not automatic — verify current case law before arguing the plaintiff lacks capacity to sue or the judgment is void. Treat lack of license as evidence of an unfair practice and a settlement lever, not a guaranteed merits defense.

The MCPA and its narrowed scope — read before pleading

The MCPA (MCL 445.901 et seq.) offers broad remedies on paper, but the Michigan Supreme Court has sharply narrowed its reach through the regulated-conduct exemption at MCL 445.904(1)(a), which exempts "[a] transaction or conduct specifically authorized under laws administered by a regulatory board or officer acting under statutory authority of this state or the United States."

• In Smith v Globe Life Insurance Co, 460 Mich 446 (1999), and Liss v Lewiston-Richards, Inc, 478 Mich 203 (2007), the Court read the exemption to ask whether the general transaction is authorized/regulated — not whether the specific misconduct is — exempting large swaths of licensed/regulated lending and financial-services conduct from the MCPA.
• Takeaway: the MCPA often does NOT reach collection on a licensed/regulated loan or credit product. Do not reflexively plead an MCPA claim for ordinary collection on regulated credit — it is vulnerable to dismissal under the exemption. The FDCPA, the RCPA (MCL 445.252), and the Occupational Code prohibited-practices rules are the right vehicles for collection-conduct claims. Verify there is no intervening authority before any categorical statement.

Statutes of limitations on the debt

Point to the corpus (references/mi-statutes-of-limitations.md and the mi-statutes-debt corpus) for the authoritative, current counts — these are drift-prone. The headline rules:

• MCL 600.5807(9) supplies the 6-year default for breach of contract not otherwise specified, capturing most credit-card and open-account debt; the clock generally runs from breach / date of last payment or activity (fact-dependent — pin down the account history).
• The 4-year UCC period (MCL 440.2725) governs the sale of goods and can displace the contract period where the obligation is for goods.
• SOL is an affirmative defense that must be pleaded (MCR 2.111(F)) or it is waived — raise it expressly in the answer. It is also a summary-disposition ground under MCR 2.116(C)(7); a time-barred debt is a strong (C)(7) motion candidate.

Chain of title / standing — Michigan UCC Article 9

A debt buyer must trace ownership from the original creditor through every intermediate buyer to itself under Michigan UCC Article 9 (MCL 440.9101 et seq.), with a Bill of Sale for each transfer, an Assignment specifically identifying this account (account number), and account-level data matching this consumer's account. A bill of sale referencing "an attached portfolio" without the attachment, or "all accounts sold on [date]" without tying to this account, is insufficient. Standing turns on whether the plaintiff can prove it owns this specific account.

Business-records foundation. To admit the account records and the assignment, the plaintiff must lay a foundation under MRE 803(6) (records of a regularly conducted activity, via a custodian or qualified witness) and MRE 902(11) (self-authenticating certified business records, in lieu of a live custodian). Recurring theme: the debt buyer's affiant has no personal knowledge of the original creditor's record-keeping and cannot lay an 803(6) foundation for another entity's records. Probe the affiant's basis of knowledge.

Forum — most consumer-debt suits are in District Court

Most Michigan consumer-debt suits are filed in the District Court, a court of limited civil jurisdiction (claims up to the statutory district-court cap — verify the current figure). The largest is the 36th District Court (Detroit). The answer clock runs under MCR 2.108 (the period depends on the manner of service — confirm the current days); miss it and the plaintiff can take a default. Default and default judgment are governed by MCR 2.603 — to set aside a default (other than for lack of jurisdiction) the defendant generally must show good cause and file an affidavit showing a meritorious defense (SOL, no chain of title, FDCPA/RCPA violation), within the rule's time limit. See mi-36th-district / mi-district-courts, mi-first-30-days, and mi-post-judgment.

The five fact patterns

Pattern 1 — Debt buyer with no chain of title. Demand the Article 9 bills of sale and account-specific assignments tying this account to the plaintiff (MCL 440.9101 et seq.); challenge the affiant's MRE 803(6)/902(11) basis of knowledge; confirm the buyer holds a LARA collection-agency license (MCL 339.901 et seq.).

Pattern 2 — Time-barred debt. Last payment 6-7+ years ago; credit-card debt is on or past the 6-year MCL 600.5807(9) line (or 4-year UCC line, MCL 440.2725). Pin the date of last activity; plead SOL (MCR 2.111(F)) and move under MCR 2.116(C)(7).

Pattern 3 — FDCPA validation / dispute violation. Consumer disputed or never got a compliant validation notice. FDCPA §§ 1692g (validation), 1692e (false/misleading), 1692f (unfair); Reg F validation content (12 C.F.R. pt. 1006). Parallel RCPA claim (MCL 445.252) reaches a "regulated person" (incl. first-party / in-house collectors) the FDCPA may not.

Pattern 4 — Wrong amount / wrong person. Inflated amount (unauthorized fees/interest) or mistaken identity / identity theft. RCPA (MCL 445.252(e)-(f)) bars inaccurate/misleading/deceptive statements in a collection communication and misrepresenting a debt's legal status or the parties' legal rights; FDCPA §§ 1692e(2)/1692f(1) (which expressly bar misrepresenting the amount and collecting amounts not owed); FCRA § 605B identity-theft block if applicable.

Pattern 5 — Unlicensed collector / debt buyer. Plaintiff or servicer holds no Michigan collection-agency license. Occupational Code Article 9 (MCL 339.901 et seq.) — operating without a license violates the Act; use as evidence of an unfair practice / settlement lever, verifying current case law before arguing the suit or judgment is void. Pair with RCPA / FDCPA theories.

Affirmative-defenses catalog

Plead all that apply in the answer (MCR 2.111(F) — defenses not pleaded are waived):

1. Statute of limitations — 6 years on contract (MCL 600.5807(9)) or 4 years on goods (MCL 440.2725); summary-disposition ground under MCR 2.116(C)(7).
2. Lack of standing / failure to prove assignment — plaintiff cannot prove it owns this account (UCC Article 9).
3. Failure to state a claim — no chain of title or specific account terms (MCR 2.116(C)(8)).
4. Lack of / failure of consideration.
5. Payment / accord and satisfaction / release / settlement (MCR 2.116(C)(7)).
6. Account stated — no agreed accounting between this plaintiff and this defendant.
7. Lack of capacity to sue — unlicensed collection agency / debt buyer (MCL 339.901 et seq.); assert with the verification caveat.
8. Identity theft (if applicable) — FCRA § 605B block.
9. Discharge in bankruptcy (if applicable).
10. FDCPA / RCPA violation (raised as a counterclaim; also a defense theme).

See references/affirmative-defenses.md for the annotated catalog.

Discovery strategy

In District Court the Michigan Court Rules' discovery provisions apply (subject to any abbreviated-discovery rules for smaller cases — verify the venue): Requests for Admission (MCR 2.312) on the elements; Interrogatories (MCR 2.309) on chain of title, custodian identity, and account-level data; Requests for Production (MCR 2.310) for bills of sale, assignments, the original agreement, periodic statements, and electronic records; then meet-and-confer and a Motion to Compel (MCR 2.313). The full RFP / RFA / interrogatory banks live in the references; see mi-discovery for mechanics.

Composition

• Statewide format: mi-statewide-format. Dominant forum: mi-36th-district, mi-district-courts.
• Answer / first response: mi-first-30-days, mi-draft-motion. Declaration: mi-draft-declaration.
• Proposed order: mi-draft-order. Notice / motion: mi-draft-note, mi-draft-motion.
• Discovery / motion-to-compel: mi-discovery. Set-aside / garnishment: mi-post-judgment.
• Deadlines: mi-deadlines. Pro se conventions: mi-pro-se. QC: mi-quality-check, mi-fact-check.

References

• references/fdcpa.md, references/reg-f.md, references/fcra.md — federal layer (see ../mi-law-references/references/federal-debt-laws/)
• references/mi-rcpa.md — RCPA (MCL 445.251-.258; practices § 445.252; damages § 445.257)
• references/mi-occupational-code-art9.md — Occupational Code Article 9 licensing (MCL 339.901 et seq.)
• references/mi-mcpa.md — MCPA (MCL 445.901 et seq.) + the MCL 445.904 exemption (Smith v Globe Life / Liss v Lewiston-Richards)
• references/mi-statutes-of-limitations.md — MCL 600.5807(9) / MCL 440.2725
• references/chain-of-title.md — Michigan UCC Article 9 doctrine
• references/evidence-debt-buyer.md — MRE 803(6) / 902(11) foundation
• references/rfp-debt-buyer.md, references/rfa-debt-buyer.md, references/interrogatories-debt-buyer.md — discovery banks
• references/affirmative-defenses.md — annotated catalog
• references/online-sources-consumer-debt.md — canonical URLs