Michigan Collection Agency Bond Overview
- Purpose: To protect consumers from unfair or damaging business practices
- Who Needs It: All collection agencies operating in Michigan
- Regulating Body: The Michigan Department of Licensing and Regulatory Affairs
- Bond Amount: $5,000—$50,000
- Minimum Price: $100
What Is a Michigan Collection Agency Bond?
A Michigan collection agency bond protects the state and the public from financially harmful debt collection practices.
The Michigan Department of Licensing and Regulatory Affairs (LARA) requires all debt collectors to file a surety bond for state licensing.
Bond Coverage Requirements for Michigan Collection Agencies
All first-year license applicants must file a $5,000 surety bond. At renewal, the LARA will calculate your new bond amount based on your average monthly business, up to $50,000.
Collection agencies structured as a repossession company need a $10,000 bond.
How Much Do Collection Agency Bonds Cost in Michigan?
In Michigan, $5,000 and $10,000 collection agency bonds cost a flat rate of $100 — no credit check required!
For higher bond amounts, we’ll review your financials to determine your personalized rate. Qualified applications can pay as low as $500 for a $50,000 bond.
Select your bond amount below for a free quote.
SuretyBonds.com offers the lowest available rates from our nationwide provider network with no added fees.
How Does a Michigan Collection Agency Bond Work?
A Michigan collection agency bond forms a legal contract between these three parties.
| Bond Party | Description |
|---|---|
| Principal | The collection agency owner filing the bond |
| Obligee | The Michigan Department of Licensing and Regulatory Affairs requiring the bond |
| Surety | The issuing surety provider |
If you violate any state laws, harmed parties can file claims against your bond. The surety will pay valid claims up to the full bond amount, but you must refund the surety.
How Do I Get a Collection Agency Bond in Michigan?
With SuretyBonds.com, you can start the bonding process online 24/7. The $5,000 and $10,000 bonds are available for instant purchase. Simply enter your information into the form on this page, and you’ll receive your bond by email in just minutes.
Higher bond amounts require a quick credit check before purchase. Once you complete the quote request form, we’ll send you your exact rate within one business day.
Be sure to include your bond form with your license application.
Can I Get Bonded With Bad Credit?
Yes, bond amounts up to $10,000 don’t require a credit check! For higher amounts, we approve 99% of applicants through our bad credit bonding program.
How Do I Renew My Collection Agency Bond?
Michigan collection agency bonds expire annually. We’ll send you renewal reminders starting 90 days before the expiration date. Simply pay the attached invoice to extend your bond for another year.
How Do I Update My Bond Information?
You can typically make minor changes to your bond form by contacting your surety company. If you purchased your bond from us, email [email protected] with the updated information.
How to Get a Collection Agency License in Michigan
First, choose your license type based on your business structure:
- Non-Owner Manager License (Individual): You manage the agency but are not the owner.
- Non-Owner Managed License (Business): The company is run by a non-owner manager.
- Owner Managed License (Business): You are the agency’s owner and manager.
Managers and owners must hold a high school diploma or G.E.D and complete 6 months of full-time experience in account collection. Once eligible, follow these steps to get these licenses:
- Purchase the required surety bond.
- Complete the application form based on your agency’s structure on MIPLUS.
- Once your application is approved, schedule and pass the Michigan Collection Agency Manager exam.
Collection agency licenses are valid for three years from the date of issuance. You can renew through your MIPLUS account.
Note that a separate license is required for each branch location.
How Much Does a Michigan Collection Agency License Cost?
You can expect to pay at least $575 for your collection agency license based on the following fees.
| Fee Type | Amount |
|---|---|
| Non-Owner Manager Application Fee | $185 |
| Non-Owner Managed Application Fee | $475 |
| Owner-Managed Application Fee | $475 |
| Surety Bond | $100+ |
Non-owned managed agencies must pay both the business and individual license fees.
When Does Debt Become Uncollectible in Michigan?
The statute of limitations for most debt in Michigan is six years. This period starts on the date of the last payment or the last account activity. Partial payments can restart the timeline.
Once a debt expires, you can no longer legally sue for the debt. However, you can still contact the debtor to request payment.
