How to Collect on an Unsecured Debt in Michigan

An unsecured debt is an account in which the lender did not require you to have collateral or security, such as an automobile or a home, as a condition of the loan. Unsecured debts are also known as signature loans. If you are collecting an unsecured debt in the state of Michigan, you must abide by the Fair Debt Collection Practices Act. You must also be aware of the statute of limitations. Once the statute passes, your ability to collect on that debt is limited.

Instructions

1

Send letters and make phone calls. One of the best ways to collect a debt is by sending out a reminder or past due notices. Call the debtor to remind him that the debt has not been paid.

2

Find out if the statute of limitations has passed for that particular debt. In the state of Michigan, the statue of limitations for debts is six years. When a debtor has not paid a debt for six years you cannot pursue legal action. Letters can be mailed and phone calls made, but legal action should not be a course of action.

3

Offer cash settlements before the statute of limitations runs out. Many debtors may want to settle their debt even though the statute of limitations has run out. A settlement is a when the debtor pays a portion of the balance owed, such as 50 percent, as settlement in full. Negotiate to remove the debt from his credit file once the payment is received.