(BOSTON 3/29/2024) – Yesterday, the Massachusetts Senate unanimously passed legislation to protect consumers and help keep people from being pushed into financial ruin if they are sued for financial debt. The new law would make debt collection practices fairer, protect wages, and make clear that no person can go to prison for their debt.

The Debt Collection Fairness Act – S.2713 – would protect thousands of families across the state, including many in communities of color, by reducing the interest rate from 12% to 3% on judgments on consumer debt, which is often old debt that has been bought by debt collection companies for pennies on the dollar.

It would also protect at least $975 in wages per week from a person subject to wage garnishment because of a debt and ensure that no one in the Commonwealth is imprisoned for failure to pay a consumer debt. Currently only $750 per week in wages is protected from garnishment. The bill would also reduce, from 6 years to 5 years, the time in which a company can bring suit to collect a consumer debt.

“Debt sent to collections typically ends up in the hands of predatory collectors who make a living squeezing lower- and middle-class families for dollars they can’t afford to pay toward often years-old debt,” said Senator Michael Moore (D-Millbury). “Hardworking Bay Staters shouldn’t have to choose between feeding their families and making a minimum payment on debt that was likely purchased by the collector for pennies on the dollar. This legislation makes reasonable changes to our system to allow creditors the tools to be made whole while ensuring indebted individuals still have the ability to get ahead of their financial past.”

This is the third time a version of the bill has passed the Senate. It now goes to the House of Representatives for consideration.

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