A bill has passed unanimously in the Massachusetts Senate that would create new restrictions and limitations on the collection of consumer debts in the state.
🧾 The big picture: Senate Bill 2559, titled the “Debt Collection Fairness Act,” would enact wide-ranging changes impacting the way judgments for consumer debts are pursued, enforced, and collected in Massachusetts. The legislation introduces new wage garnishment limits, shortens statutes of limitations, curtails interest rates, and eliminates the possibility of jail for nonpayment of consumer debts.
📌 Key provisions:
- Wage garnishment limits: The bill would exempt from garnishment either 90% of a debtor’s gross weekly wages or 65 times the applicable minimum wage, whichever is greater. Consumers could seek additional exemptions for financial hardship through a court-provided form.
- Shorter statute of limitations: Debt collectors would have only five years from when the debt arises to file suit. A payment made after the limitations period would not revive the debt. Judgments would be enforceable for up to 10 years, with one 10-year renewal allowed.
- Restrictions on post-judgment proceedings:
- Consumers could file a financial affidavit before a payment hearing to prevent it from being scheduled.
- No arrest warrants could be issued without proof of proper notice.
- No individual could be jailed for failing to pay a consumer debt.
- Caps on interest and fees:
- Interest on judgments and renewals would be capped at 3% per year.
- Other post-judgment interest would be limited to 12% annually.
- Attorney fees would be capped at 15% of the debt, and only if authorized by contract.
- Enforcement and remedies:
- Any violations of the law would also violate the state’s consumer protection law, Chapter 93A.
- Contracts violating the act would be deemed void and unenforceable.
🗓 Effective date: The bill would take effect on January 1, 2026. Some provisions would not apply retroactively to debts accrued or judgments issued prior to that date.
