Do Detroit Blight Tickets Affect My Credit Score?
Category: Financial Risk
Common Question: "Is this just a city fine or a real debt?"
A Blight Ticket is not like a parking ticket. When it goes to the Department of Appeals and Hearings (DAH), it is adjudicated by an administrative court.
When you lose (or default), the result is a Civil Judgment, identical in legal weight to a judgment from a District Court.
The Collections Process
If you ignore the judgment, the City of Detroit utilizes aggressive collection tactics:
1. Credit Reporting The City can report unpaid judgments to the major credit bureaus.
- Impact: A "Public Record" derogatory mark on your credit report can drop your score by 50-100 points.
- Consequence: This can disqualify you from future mortgages or raise your interest rates on refinance loans.
2. State Tax Garnishment The City intercepts Michigan State Income Tax refunds. If you (or your LLC) are due a refund, the Treasury will divert it to pay your blight fines.
3. Wage Garnishment In severe cases involving large balances, the City can seek a court order to garnish wages or levy bank accounts attached to the judgment debtor.
The "LLC" Shield (And When It Fails)
"But my property is in an LLC!"
- Yes, this protects your personal credit score, generally.
- However, it destroys your Commercial Credit. Lenders looking at your LLC for a portfolio loan will see the outstanding judgments.
- Risk: Many commercial lenders have "Bad Boy Carve-outs" that trigger default if the borrower has unpaid judgments.
Don't let a $200 ticket ruin your 750 credit score.