The proposed bill, known as the Debt Collection Fairness Act, introduces significant amendments to the General Laws regarding consumer debt collection practices. It establishes definitions for key terms such as "consumer," "creditor," "debt collector," and "garnishment," and outlines protections for consumers facing wage attachments due to judgments for consumer debts. Specifically, it exempts a portion of consumers' earnings from garnishment, allows consumers to claim additional exemptions based on financial hardship, and prohibits employers from taking adverse actions against employees due to garnishments. The bill also sets a five-year statute of limitations for initiating actions to collect consumer debts and restricts the interest rates on judgments related to consumer debts to a maximum of 12% per annum, reducing to 3% for judgments entered after January 1, 2026.

Additionally, the bill mandates that plaintiffs provide written notice to consumer debtors before supplementary processes and prohibits the issuance of warrants for failure to appear at such hearings. It ensures that no individual can be imprisoned for failing to pay a consumer debt and establishes that any contract provisions violating the new regulations will be deemed void. The act is set to take effect on January 1, 2026, and includes specific provisions regarding the applicability of its sections to existing consumer debts and contracts.

Statutes affected:
Bill Text: 246-28