Michigan Senate Bill SB0408

Michigan 2023-2024 Regular Session

• Introduced: 6/27/23
• Refer: 6/27/23
• Report Pass: 10/24/24
• Refer: 10/24/24
• Report Pass: 12/12/24
• Engrossed: 12/12/24

Caption

Civil procedure: execution; procedures for collection of judgments; revise. Amends secs. 2807, 4011, 4015, 4031, 4061a, 6023, 6027, 6059 & 6104 of 1961 PA 236 (MCL 600.2807 et seq.) & adds secs. 4001a, 4032, 4033, 6001a, 6023b, 6023c, 6023d, 6023e, 6023f, 6023g & 6023h.

Impact

If enacted, this legislation will have significant implications for state laws governing debt collection practices. The bill introduces stricter guidelines on what can be garnished and establishes clearer definitions of exempt income and assets. It also enhances the rights of consumers by limiting the amount of garnishable earnings, thus providing better protection for low-income individuals and families facing debt collection. Full enforcement of these changes is predicted to alter existing practices among creditors and collection agencies in Michigan.

Summary

Senate Bill 0408 aims to amend Michigan's civil procedure laws specifically concerning the procedures for the collection of judgments. The bill revises sections related to garnishments, creditor rights, and the definition of key terms such as 'consumer,' 'creditor,' and 'exempt' under the current law. By clarifying these provisions, SB0408 endeavors to streamline the processes involved in executing judgments against debtors, making it easier for creditors to collect what is owed to them while incorporating protections for debtors against undue burdens.

Sentiment

The general sentiment around SB0408 appears divided among stakeholders. Advocates argue that the changes will improve fairness in the debt collection process and enhance protections for consumers, aligning with evolving public sentiments around borrower rights. Conversely, some creditors and collection agencies express concerns that the stricter rules could impede their ability to recover debts, potentially leading to increased losses on outstanding claims, creating a tension between debtor protections and creditor rights.

Contention

Notable points of contention have emerged regarding the effectiveness of the proposed exemption laws and their practicality. While supporters laud the effort to fortify protections for vulnerable debtors, critics question whether the bill will sufficiently address the needs of creditors. Furthermore, there is an ongoing debate about the balance between robust consumer protections and the need for maintaining a viable, functioning debt recovery system in the state. The outcome of this bill could set a precedent for how such matters are handled in the future.