Michigan Democrats are taking a second run at a sweeping rewrite of the state’s garnishment and exemption laws, reintroducing a nine-bill affordability package on July 29 after the original versions died in an unusual procedural standoff.
The centerpiece for the collections industry is House Bill 6230, introduced by Rep. Kara Hope and Rep. Denise Mentzer. The bill would amend the Revised Judicature Act to exempt means-tested public assistance, unemployment compensation, disability benefits, workers’ compensation, and federal and state earned income tax credits from garnishment.
The bill goes well beyond benefit protections. It would cap wage garnishment at the lesser of 15% of garnishable earnings or the amount exceeding 35 times the greater of the federal or state minimum wage, with the state minimum wage likely controlling in Michigan. It would create an automatic exemption for the first $800 held in deposit accounts and require financial institutions served with a garnishment to calculate and shield exempt funds deposited in the preceding 90 days. Banks could not charge debtors garnishment processing fees unless reasonable and disclosed in their standard fee schedules.
Judgment creditors would face new procedural hurdles, including court-prescribed exemption notices at judgment entry, seizure, and debtor examinations, plus hearings before executing on property presumed exempt. Executing officers would be instructed not to turn over property they can reasonably identify as exempt. The bill also expands anti-retaliation provisions, allowing courts to award reinstatement, lost compensation, and attorney fees against employers who discipline, fire, or refuse to hire workers over garnishment actions, with independent contractors now covered.
Homestead exemptions would jump from $3,500 to $125,000, or $200,000 for debtors who are 65 or older or disabled, with dollar amounts indexed to inflation every three years. Starting in 2027, the state treasurer would generally stop intercepting state EITC payments to satisfy consumer debt judgments.
The bills’ path back to the House floor follows a nearly two-year saga. The original package passed both chambers in late 2024 but was never transmitted to Gov. Gretchen Whitmer, and courts ruled House Speaker Matt Hall violated the state constitution by withholding them. Whitmer ultimately vetoed the bills, saying implementation had become untenable. Hall has signaled willingness to negotiate but says Democrats will need to support Republican priorities, including property tax cuts, in exchange.
If enacted, the act takes effect 180 days after signing, giving creditors and agencies collecting in Michigan a compliance runway that would likely land in 2027.
