Who requires it
Licensing and Regulatory Affairs (LARA) — Bureau of Professional Licensing (collection agencies)
License & permit · Michigan
Michigan Collection Agency Bond
Michigan collection agencies must keep a surety or cash bond while licensed. Occupational Code § 907 sets a statutory range of $5,000 to $50,000. Administrative Rule R 339.4007 starts most new collection agencies at least at $5,000, floors repossession activity at $10,000, and steps renewal amounts with average monthly business up to the $50,000 ceiling.
Common bond amount
$5,000–$50,000 by average monthly business
Initial collection agencies: at least $5,000. Repossession or collection-with-repossession: $10,000 minimum. Renewals follow the R 339.4007 table up to a $50,000 statutory ceiling.
How you file
Surety bond or cash bond filed with Licensing and Regulatory Affairs
Renewal
Keep in force while licensed; 30-day department cancellation notice
Who requires it
Collection agencies licensed under Occupational Code Article 9, including repossession agencies. The bond protects persons damaged by wrongful taking of collected money or failure to report or remit collection proceeds.
How much is required
MCL 339.907 authorizes the department to set an amount it considers necessary within $5,000–$50,000. R 339.4007(1) requires an initial collection-agency bond of at least $5,000 and a $10,000 minimum at all times for a repossession agency or a collection agency that also performs repossessions. For renewals, R 339.4007(2)–(3) calculate the amount from average monthly business on the annual report, using a table that rises in $5,000 increments from under $5,000 average monthly business ($5,000 bond) through more than $50,000 average monthly business ($50,000 bond).
How to get and file it
Have a Michigan-authorized surety execute a surety bond in the form Licensing and Regulatory Affairs (LARA) requires, or arrange an acceptable cash bond, then file with the Bureau of Professional Licensing collection-agency application or renewal. Match the name on the bond to the license file. Maintain the required amount for each license. The surety may cancel with thirty days’ written notice to the department; R 339.4009 provides for summary license suspension if a replacement is not on file before the original bond expires. If the annual report understated the figures used for the amount, the licensee has ninety days after department notice to correct the bond amount or face summary suspension.
Cost note
Those figures are the required bond amount, not the premium you pay. See bond amount vs premium. Bond amount vs premium →
Requirement checklist
- Statutory range
- $5,000 minimum to $50,000 maximum (MCL 339.907)
- Initial collection agency
- At least $5,000 (R 339.4007(1)(a))
- Repossession activity
- $10,000 minimum at all times (R 339.4007(1)(b))
- Renewal calculation
- Average monthly business from the annual report, stepped per R 339.4007(3) table
- Cancellation
- Surety gives department 30 days’ advance written notice
Official sources
Related resources
Frequently asked questions
How is average monthly business defined?
R 339.4001 defines it as one-twelfth of the total yearly amount due to clients. For a collection agency, that is based on trust-account net amounts due to clients; for repossession, on the current market value of items repossessed for clients in the preceding year; combined if the agency does both.
Can the bond exceed $50,000?
No. MCL 339.907 caps the department’s required amount at $50,000. Ignore third-party materials that cite a higher Michigan collection-agency ceiling.
Surety basics (not repeated here)
Universal surety concepts explained once—linked here instead of repeated on every state or bond page.
Continue with a Michigan application
Michigan will be preselected. Choose your bond type in the application—we confirm the correct product against your agency form before anything is issued.
Last verified 2026-08-10. This guide is based on verified educational content and official sources.
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