Michigan Collection Agency Bond

Michigan requires a collection agency bond to collect debts. The size is based on your business. It is filed with the Michigan LARA. You can set it up online.

Bond Amount
$5,000–$50,000
Typical Premium
$100–$2,500/yr
Term
1 Year
Required By
Michigan LARA (Dept. of Licensing and Regulatory Affairs)
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What Is the Michigan Collection Agency Bond?

Think of the Michigan collection agency bond as a promise to follow the rules. Break a collection law, and they can claim against the bond. The surety collects from you after.

New agencies post $5,000. At renewal, the amount can rise to $50,000 based on your collection volume.

Who Needs This Bond in Michigan?

How to Get Bonded — Step by Step

  1. Begin your Michigan application.
  2. Buy your collection agency bond online here — fast quotes.
  3. File the bond with the Michigan LARA.
  4. Get licensed and open for business.

Renewal & Continuous Bond Coverage

Plan to renew your Michigan collection license every year. Keep the bond current. A gap can suspend your license.

Frequently Asked Questions

Does the Michigan bond protect me?

No. The bond protects your customers and the state, not you. If a claim is paid, you repay the surety. It is not insurance for you.

How fast can I get bonded in Michigan?

We shop several sureties for you, often within a day. Many bonds are issued the same day for good credit.

How much does the bond cost?

You pay a yearly premium — a small percent of the bond amount. Your rate depends mostly on your credit.

How a Surety Bond Works

A collection agency bond is a type of surety bond. The picture below shows the three parties and what happens if someone files a claim.

Diagram of how a surety bond works: the obligee requires the bond, the principal applies and signs an indemnity agreement, and the surety issues the bond; if the principal fails, the obligee files a claim, the surety investigates and may pay, and the principal reimburses the surety.

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Related: All Michigan surety bonds · What is a surety bond? · How surety bond costs are calculated

Underwriting Disclosure. All surety bond applications are subject to underwriting review and approval by the issuing surety company. Quoted premiums are estimates only; final pricing is determined by individual underwriting factors, which may include personal and business credit history, financial statements, industry experience, and claims history. Many bonds qualify for instant online approval, while others may require additional documentation, financial review, or indemnitor signatures prior to issuance. SuretyBondly makes no representation, warranty, or guarantee of approval, eligibility, premium amount, bond form, or issuance timing. Bond amounts, forms, and requirements are governed by the applicable obligee and statutory authority and may change without notice. Information provided on this page is for general informational purposes only and does not constitute legal, financial, or tax advice.