A debt collection bill advanced out of committee in the Massachusetts Senate yesterday and is expected to be voted on by the full Senate later this week that seeks to make the collection process more “fair.”
The bill, S 2713, was introduced by state Sen. Jamie Eldridge. It was passed out of the Senate’s Ways and Means Committee yesterday and could be voted on by the full Senate on Thursday, according to a published report.
What It Does: The bill lowers the statute of limitations on consumer debt to five years from six while also increasing the amount of exempted wages that consumers can protect from garnishment. Collectors would be prohibited from filing a lawsuit or initiating an arbitration proceeding after the statute of limitations had expired.
- Currently, 50% of the state’s minimum wage ($750) or 85% of a worker’s gross wages are protected from garnishment. If enacted, those figures would increase to 65 times the state’s minimum wage ($975) or 90% of what the worker takes home each week.
- The bill would also lower the post-judgment interest rate to 3% from 12%, but that would apply only to new judgments issued after Jan. 1, 2025.
- Employers would be prohibited from taking adverse action against an employee or refusing to hire a candidate because of a garnishment for a consumer debt.
- The bill also extinguishes the right to collect on a debt after the statute of limitations has expired.
- Collectors would be prohibited from seeking warrants without evidence that a hearing notice was served on a consumer.
