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Senate approves Debt Collection Fairness Act to expand protections for consumers
Summary
The Senate passed An Act Relative to Fairness in Debt Collection (Senate No. 2551), adopting Ways and Means technical changes and approving provisions that raise garnishment protections, lower judgment interest rates, prohibit imprisonment for consumer debt, and shorten the statute of limitations on consumer debt claims.
The Massachusetts Senate approved An Act Relative to Fairness in Debt Collection, Senate No. 2551, sending the bill to be engrossed after adopting a Ways and Means amendment. The sponsor described the measure as the Debt Collection Fairness Act (DCFA) and outlined four primary reforms.
Sponsor remarks said the bill would (1) raise the protected garnishment threshold from 50 times the minimum wage to 65 times (the speaker cited $975 as an example), or 90% of gross wages, whichever is greater; (2) reduce the post-judgment interest rate on consumer debt judgments (sponsor cited a change from "12% to 3%" in remarks); (3) ensure that no person in Massachusetts can be jailed for failure to pay consumer debt; and (4) shorten the statute of limitations for debt collection actions from six to five years.
The sponsor framed the bill as an update to "several long out of date consumer protections" and said it was not intended to help people avoid valid debts but to prevent practices that push low-income people "over a financial precipice." He cited data presented to the Financial Services Committee that about 15% of Massachusetts residents had a debt in collection in 2023 and that more than 600,000 debt claims were filed in the Massachusetts trial court between 2017 and 2021.
The sponsor gave examples of harms the bill would address, including the use of civil arrest warrants in small-claims debt matters; he related an example from Greater Boston Legal Services of a client who faced an arrest warrant and was told to sell an exempt car to pay a judgment until legal aid intervened.
A technical Ways and Means amendment was described on the floor as a statutory cross-reference correction; senators voted to adopt that amendment and then voted to pass the bill to be engrossed. The clerk conducted a roll-call vote; the clerk announced the bill "is passed to be engrossed" after recording affirmative votes. The recorded roll-call entries on the floor showed multiple senators voting "yes"; the clerk announced that the bill passed with the available affirmative votes and no negative votes recorded on the floor during the announced sequence.
Supporters on the floor said the DCFA was developed with input from the National Consumer Law Center, Greater Boston Legal Services, and support from the attorney general's office. Senators complimented the sponsor and the committee staff for moving the bill forward.
The bill will proceed to further legislative steps as the session continues.
