The proposed bill, titled the "Debt Collection Fairness Act," aims to enhance consumer protections in debt collection practices in Massachusetts. It introduces a new chapter, Chapter 93M, which defines key terms related to debt collection, such as "consumer," "creditor," and "debt collector." The bill establishes exemptions for consumers' earnings from garnishment, allowing a certain percentage of wages to be protected from attachment to satisfy consumer debt judgments. Additionally, it provides a mechanism for consumers to claim undue financial hardship to seek further exemptions and outlines the priority of multiple attachment orders. The bill also prohibits adverse employment actions against individuals due to garnishments and exempts child support payments from collection under this chapter.

Furthermore, the bill sets a five-year statute of limitations for initiating actions to collect consumer debts and restricts the revival of such debts after the limitations period has expired. It mandates that creditors provide written notice to consumers before supplementary processes related to debt collection and prohibits imprisonment for failure to pay consumer debts. The bill also limits the interest rates on judgments for consumer debts and establishes that any violations of the new provisions will be considered violations of existing consumer protection laws. The act is set to take effect on January 1, 2026, with specific provisions regarding the applicability of the new rules to existing debts and contracts.

Statutes affected:
Bill Text: 246-28