What Are Michigan's Repossession Laws?


Quick Answer

Michigan's laws for repossession are contained in the Uniform Commercial Code, which governs certain commercial transactions, according to the official State of Michigan website. Repossession of a vehicle in default of a security agreement is allowed without committing a breach of the peace, notes the American Recovery Association.

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Full Answer

The debtor has the right to redeem the collateral, which is the repossessed vehicle, at any time before its disposition by submitting full payment of the obligation owed under the security agreement, plus reasonable expenses incurred by the creditor in the repossession, explains the American Recovery Association.

If the debtor has paid at least 60 percent of the principal amount owed, the creditor must dispose of the vehicle in a public or private sale under section 440.9620 of the Michigan Uniform Commercial Code, states the Michigan Legislature website. The debtor must receive notice of the date and time of the intended disposition proceedings. If the debtor has paid less than 60 percent, the creditor can keep the repossessed vehicle in satisfaction of the outstanding debt.

People who repossess a vehicle must hold a valid Collection Agency License and be bonded by the state's Bureau of Consumer Services, according to the American Recovery Association.

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