Portfolio Recovery Associates Is Suing Me in Michigan — What Do I Do?

Portfolio Recovery Associates LLC ("PRA") is a wholly owned subsidiary of PRA Group, Inc. (NASDAQ: PRAA), one of the two largest publicly traded debt buyers in the United States. PRA is headquartered in Norfolk, Virginia, and files thousands of consumer collection lawsuits each year, including a high volume in Michigan.

PRA buys portfolios of charged-off consumer debt — primarily credit cards from Synchrony Bank, Capital One, and various store-card issuers — at deep discounts, then collects through in-house collectors and outside Michigan collection counsel.

The Consumer Financial Protection Bureau has taken two major enforcement actions against PRA. In 2015, the CFPB ordered PRA to pay $19 million in consumer redress plus an $8 million civil money penalty. In 2023, the CFPB took a second action for continued violations, resulting in an additional $24 million settlement.

Why this matters in Michigan: Michigan has several distinctive procedural protections for defendants — including the MCL 600.2145 counter-affidavit rule, the MCL 600.8407(1) bar on debt buyers in Small Claims, and the Brownbark II rule on bulk assignments. The exact documentation gaps the CFPB sanctioned PRA for map directly onto these Michigan defenses.

If you were just served with a complaint from PRA in Michigan Circuit Court or District Court, here is what almost certainly happened. You fell behind on a credit card or other consumer account. The original creditor wrote the account off and sold it as part of a portfolio to PRA at a deep discount. PRA is now suing you in Michigan because a default judgment is the most efficient way to convert that purchase into a full-balance recovery.

Michigan defendants get a procedural advantage that defendants in many states do not have: under MCL 600.8407(1), debt buyers (assignees) are barred from the Small Claims Division entirely. That means PRA must file in District Court General Civil where you have full discovery rights — interrogatories, requests for production, depositions — rather than the simplified, evidence-light Small Claims procedure.

In Michigan, a default judgment carries serious consequences. With a judgment, PRA can garnish up to 25% of your disposable earnings, issue periodic garnishments on your bank account, and pursue other collection remedies. A Michigan judgment is valid for ten years and renewable.

Filing a real Answer flips the case from a near-automatic default into a real lawsuit that PRA must actually prove under MCR 2.201(B), Brownbark II, and Michigan's assignment-pleading rules.

Michigan gives you twenty-one days to file your Answer after you were served with the summons and complaint, if you were served within Michigan. This deadline is set by MCR 2.108(A)(1). If you were served outside Michigan, you have twenty-eight days under MCR 2.108(A)(2).

You count the twenty-one days starting the day after service. Weekends count. If the deadline falls on a weekend or court holiday, the deadline rolls to the next business day under MCR 1.108. "Served" in Michigan generally means a sheriff, deputy, court officer, or other authorized adult personally handed you the papers, or — under certain conditions — left them with someone of suitable age at your usual residence and mailed a copy.

If you miss the twenty-one-day deadline, PRA will move for default judgment under MCR 2.603. Once a default is entered, vacating it requires a motion under MCR 2.603(D) showing good cause for the failure to respond and a meritorious defense.

There is one Michigan-specific procedural feature you must check immediately: did PRA attach a sworn "affidavit of amount due" to the complaint? If they did, the affidavit becomes prima facie evidence of the amount owed UNLESS you file a sworn counter-affidavit with your Answer (see Section 7 below). This is one of the most-missed defense steps in Michigan.

Michigan has strong procedural rules requiring debt buyers to plead and prove the assignment of the underlying debt. Under MCR 2.201(B) and Michigan common law going back to Masterspark Co. v. Hickerson, 211 Mich. 411 (1920), an assignee plaintiff must plead the assignment in the body of the complaint, not merely allege ownership.

The leading modern case is Brownbark II LP v. Bay Area Floorcovering, 295 Mich. App. 248 (2011). The Michigan Court of Appeals held that a generic block assignment without account-level identification is insufficient. The plaintiff must show that the specific account at issue was transferred — not just that some bulk transaction occurred.

This maps directly onto the CFPB's findings against PRA. The 2015 consent order required PRA to obtain the original cardholder agreement and account-level transfer files before suing — and the 2023 action found PRA still falling short. The exact paperwork PRA was sanctioned for lacking is the same paperwork Brownbark II requires PRA to produce.

In practice, PRA complaints filed in Michigan often fall short. The chain of assignment is often presented as a generic block transfer of thousands of accounts. The specific account number is often not tied to the bills of sale. The original cardholder agreement is often not attached. Each defect supports a motion for summary disposition under MCR 2.116(C)(8) or (C)(10).

In addition to assignment defects, Michigan's evidentiary rules under MRE 803(6) require the custodian who authenticates the records to lay foundation showing personal knowledge of how the records were created and kept. A PRA custodian generally cannot testify about how Synchrony Bank kept its account records. This is an evidentiary challenge that often surfaces at trial or summary disposition.

For credit card debt and most consumer accounts in Michigan, the statute of limitations is six years under MCL § 600.5807. The clock starts running on the date of your last payment.

If you made your last payment in March 2018, the six-year clock began on that date and expired in March 2024. A lawsuit filed in late 2024 would be filed outside the limitations period and would be time-barred.

The statute of limitations in Michigan is an affirmative defense that must be raised in your Answer or it is waived. Under MCR 2.111(F), affirmative defenses must be specifically pleaded.

Michigan's 6-year SOL is on the longer end nationally, but the assignment-pleading defenses under MCR 2.201(B), the small-claims bar under MCL 600.8407(1), and the affidavit/counter-affidavit rule under MCL 600.2145 give Michigan PRA defendants strong tools beyond just the time-bar defense. The CFPB has specifically found PRA filed lawsuits on time-barred debts in both 2015 and 2023, so check your dates carefully.

Most credit card agreements contain a clause requiring that any dispute be resolved through binding arbitration administered by AAA or JAMS. When PRA bought your account, they bought it subject to whatever terms were in the original cardholder agreement.

Michigan has unusually strong rules favoring arbitration motions. The Michigan Uniform Arbitration Act (MCL 691.1681 et seq.) requires the trial court to stay litigation pending arbitration when a valid arbitration clause exists. Under MCL 691.1687(1), the stay is mandatory — the court has no discretion to refuse it once it finds a valid clause.

This is a powerful defense for Michigan PRA defendants. AAA and JAMS commercial filing fees for a business claimant typically run from $1,500 to $5,000 or more. If the disputed debt is, say, $3,200, the cost of arbitration may exceed the recoverable amount.

When a Michigan defendant files a motion to compel arbitration — and the court grants it under MCL 691.1687 — PRA must choose between paying thousands in arbitration filing fees or abandoning the case. They very often abandon, which can result in a dismissal.

To use this defense, you generally need a copy of the original cardholder agreement showing the arbitration clause. PRA is required to produce that document if you request it during discovery. Pair the arbitration motion with an MCR 2.116(C)(8) attack on the assignment pleading and a Brownbark II chain-of-title defense for maximum leverage.

Your Answer is the most important document you will file in this case. A good Answer in Michigan does three things: it admits or denies each numbered allegation under MCR 2.111(C), it raises every applicable affirmative defense under MCR 2.111(F)(2), and — where appropriate — it raises a counterclaim.

For the admit-or-deny portion: do not admit anything you do not actually know. If PRA alleges that you owed Synchrony Bank $3,217.42 as of a charge-off date you do not remember, deny that allegation for lack of knowledge.

The affirmative defenses to consider in a Michigan PRA Answer include lack of standing or chain of title under MCR 2.201(B) and Brownbark II; statute of limitations under MCL § 600.5807; failure to state a claim under MCR 2.116(C)(8); account stated cannot be established; arbitration clause; and Small Claims jurisdiction violation under MCL 600.8407(1) if PRA improperly filed in Small Claims.

The most important Michigan-specific item: if PRA attached a sworn "affidavit of amount due" to the complaint, you MUST file a sworn counter-affidavit with your Answer under MCL 600.2145. If you do not, the affidavit becomes prima facie evidence of the amount owed — handing PRA one of the elements of their case for free. Many pro se defendants miss this step. Do not.

Where FDCPA violations are present — and PRA's twin CFPB consent orders make these unusually likely — consider an FDCPA counterclaim in federal court for statutory damages plus attorney's fees.

Michigan has several consumer protection statutes that apply to PRA cases. The Michigan Collection Practices Act, codified at MCL §§ 445.251–445.258, regulates collection practices and provides a private right of action under § 445.257 for actual damages, statutory damages of up to $50, and attorney's fees.

The Michigan Occupational Code (MCL § 339.901 et seq.) requires collection agencies operating in Michigan to be licensed. Unlicensed collection by an out-of-state debt buyer can support a defense to the suit.

The Michigan Consumer Protection Act (MCL §§ 445.901 et seq.) prohibits unfair or deceptive practices in trade or commerce. Application to debt collection is more limited than under the FCEUA in Pennsylvania or the CSPA in Ohio, but it can be relevant where the conduct is independently deceptive.

The federal FDCPA also applies to PRA. The FDCPA prohibits false statements, misrepresentations of the amount or character of the debt, and abusive collection tactics. FDCPA violations entitle you to up to $1,000 in statutory damages plus attorney's fees in federal court. The CFPB findings against PRA — collecting unverified debts, using false affidavits, suing without adequate documentation — are direct evidence of FDCPA-violative conduct.

The combination of Michigan's assignment-pleading rules, the small-claims bar, the mandatory arbitration stay, FDCPA counterclaim availability, and PRA's twin CFPB consent orders means PRA faces real downside risk in Michigan cases.

After you file your Answer with the Michigan court clerk and serve a copy on PRA's attorney, the case enters discovery. Discovery in Michigan is governed by MCR 2.301 and following.

In a PRA case, this is where the chain-of-title defense gets tested. You can serve a request for production of documents under MCR 2.310 demanding every assignment document, every bill of sale, the original cardholder agreement, and the complete account history. PRA must respond within twenty-eight days. If they cannot produce a clean chain of title and an authenticated account record satisfying MCR 2.201(B) and Brownbark II, their case is in serious trouble.

What very often happens next is a settlement offer. Michigan practitioners report that PRA commonly settles real-Answer cases for forty to sixty cents on the dollar, sometimes much less.

If the case does not settle, it proceeds to a court date. Cases under $7,000 would normally be in Small Claims — but MCL 600.8407(1) bars debt buyers from that division, so PRA cases land in District Court General Civil, where you have full discovery rights and a more robust procedural environment.

Answered is a self-help legal platform built specifically for pro se defendants in consumer debt collection lawsuits. The Michigan playbook was reviewed by a Michigan-licensed consumer-rights attorney and is built around the specific statutes and rules that govern PRA cases — MCR 2.108(A)(1), MCR 2.111(F)(2), MCR 2.201(B), MCL 600.2145, MCL 600.5807, MCL 600.8407(1), MCL 691.1687, and Brownbark II.

When you upload your summons and complaint, Answered does the following: it extracts your service date and your 21-day Answer deadline; it scans for the procedural defects most commonly found in PRA pleadings, including missing assignment pleading under MCR 2.201(B), generic block-assignment defects under Brownbark II, and missing original cardholder agreement (the exact defects the CFPB sanctioned PRA for); it checks whether PRA attached an "affidavit of amount due" requiring a counter-affidavit under MCL 600.2145; it identifies whether your debt may be time-barred under the six-year SOL of MCL 600.5807; it checks whether PRA improperly filed in Small Claims in violation of MCL 600.8407(1); it checks whether an arbitration clause is likely available under MCL 691.1687; and it generates a court-ready Answer.

The Answer document is formatted for Michigan Circuit Court or District Court General Civil, includes the proper caption and case style, and contains the affirmative defenses and (where applicable) the sworn counter-affidavit under MCL 600.2145.

Pricing is simple: free to start, and a one-time $99 charge to unlock and download your final documents.