Dealing with a party that has defaulted on their car payment can be tasking, and rightly so. You have to make attempts to repossess the car without breaking Michigan laws that govern said recovery. This article delves into all you need to know about Michigan repossession laws and how best to protect yourself in the event that you need to repossess a vehicle from a borrower.

Why is Michigan Considered a Self-Repossession State

Michigan is considered a self-repossession state because if a debtor fails to make payments on their car, as a lender, you are allowed by the law to take possession of the said vehicle without going to court first or even giving notice. So long as there is no breach of peace, the lender, or their agents, are allowed to gain access and take possession of the vehicle.

Michigan Repossession Laws

Michigan’s repossession laws state that the lender has the right to take possession of the vehicle when the borrower fails to pay the amount due. Michigan has adopted the Uniform Commercial Code, which allows the said lender to enter your property and take possession of the vehicle if you fail to make timely payment.

Often, the most typical scenario is when the lender fails to make their payments. This is considered a breach of contract which the borrower had signed with the auto lender.

Statute of Limitations on Car Repossession

Note that within the state, the Michigan Public Act 236 governs the expiration or time limit of any repossessions. As a debtor, you have to consider the statutes on Out of State, criminal and civil judgments. Other than these, you also have to consider the Fair Debt Collection Practices Act (FDCPA). The latter necessitates that any calls made to the debtor should be at reasonable hours. What’s more, you have to be respectful and avoid any abusive tactics even as you seek to repossess the vehicle with overdue payments. Altogether, you are tied down to 24 months, after which the law does not allow you to take repossession of the vehicle.

Lien on File

According to Michigan’s vehicle code section 217, for a lender to take repossession of a vehicle, particularly for non-payment, the lender must have a valid lien filed against the motor vehicle in question. This lien against said vehicle must include its identification number, the name of the lender, and the interest it has accrued. Note that it is unlawful to try and take reposition of a vehicle without the proper lien.

Protection of Peace

The Michigan Universal Commercial Code section 440-9503 mandates that as a lender, you have the right to take possession of a motor vehicle in the event of non-payment. Still, you are not permitted to violate the law or cause a breach of peace. What’s more, as a lender, your representatives are not allowed to gain access to a residence without the debtor’s consent. Further, the representative is not allowed to gain entry of a locked garage or residence, even as they serve the repossession order.

Right to Redeem

As you serve the repossession order, Michigan law requires that you advise the debtor of their right to redeem the vehicle. Specifically, as the lender, you are required by law to make it known to the borrower that they can take their car back soon as they pay the amount due and any other costs incurred by you during the repossession.


Can a car be repossessed right now during the pandemic?

Yes. Cars can be repossessed even during the pandemic.

How long before a lender can repossess a car?

A lender can repossess a car after the stipulated grace period following non-payment on the loan.

How long does a repo stay on your credit?

A repo stays on your credit for a maximum of two years following the default on payment.

How many car payments can you miss before repo?

For most repo companies, your car is repossessed the moment you miss a maximum of two car payments.

Can a repo man move another car to get to yours?

Yes. A repo man can move another car to get to yours, but they are not allowed to damage the car or your personal property.

When Should You Hire An Attorney

The moment you have a debtor default on the payment of their vehicle, you want to get legal advice. This would mean hiring an attorney the moment they go past the grace period you have allowed within your contract with them.

Need Help Facing Delinquent Debt? Contact Hanna & Jarbo

Hanna & Jarbo have extensive experience in debt collection. What’s more, they have specialized in breach of contract defenses which should see your case go smoothly. Specialty areas include:

  • Supplier Account Receivables
  • Returned Checks (including charge-back credit card payments)
  • Landlord-Tenant Debt & Money Judgments
  • Charged-off or non-paying commercial credit portfolios
  • Construction debts
  • Auto loan and deficiencies
  • General loans, notes, and credit lines in default
  • Secured and unsecured judgments or liens
  • Foreign (non-Michigan) judgments
  • Mortgage/Land Contract deficiencies
  • Other commercial paper receivables

What Does Working With Us Look Like?

  1. Set up a free consultation call. We’ll explain everything you need to know about debt collection
  2. Give us your debtor’s information. We need to know what to collect. Invoices, IOUs, leases, or promissory notes. Whatever you’ve got, we can use it.
  3. Sit back and relax. You don’t have to do anything further while we track down and collect your debt. We’ll do whatever is necessary to get your money back.

Benefits of Working With Us

At Hanna & Jarbo, we understand just how difficult repossessions can be. When you decide to work with us you’re already one step ahead since you can leverage our experience for faster results.

What’s more, we charge fair rates, and as such we are cost-effective. We do things the right way, right from the start and that saves you money and time.

A neat element of our practice is that we do not charge you out of pocket, only on debts recovered.

Repossession is dangerous and will often be marred with rising tensions. As a lender, you are subject to not only the violence that might come from the repo but also the laws that govern the different aspects of the consumer credit industry.

What’s more, you are bound by the American Recovery Association codes of conduct which govern the way in which you can collect any deficiency balances in line with Michigan repossession laws.


Overall, if you want to have a consistent approach in how you take possession of cars with overdue payments without convoluting the set of laws in place, consider contacting Hanna & Jarbo, PLLC.

Collectively, we have been able to achieve debt collection 85% of every case. You won’t find better debt collection services anywhere in the Midwest!