Relative to fairness in debt collection
This legislation will amend existing laws by establishing a structured set of regulations governing how and when creditors and debt collectors can pursue debts. A notable provision is that it limits the garnishment of earnings such that 90% of the debtor's gross weekly wages are protected, alongside creating a mechanism for consumers to assert additional hardship exemptions in court. Furthermore, the act establishes that no individual can be jailed for failure to pay a consumer debt, which is a significant change that enhances consumer rights and protects against abusive collection tactics.
Senate Bill S2713, titled the 'Debt Collection Fairness Act,' aims to reform various aspects of consumer debt collection practices in Massachusetts. It introduces comprehensive definitions related to consumer debts, creditors, debt collectors, and various processes under which debts may be collected. The bill stipulates clearer consumer protections by ensuring that a significant portion of a debtor's earnings is exempt from attachment and garnishment, effectively shielding consumers from aggressive debt-collection practices that can exacerbate financial hardship.
There have been points of contention around the bill in terms of the balance it strikes between protecting consumers and ensuring creditors can effectively collect on debts. Some stakeholders argue that the proposed changes could render it more challenging for creditors to recoup debts, while advocates for consumer rights believe these measures are necessary to prevent exploitative practices in debt collection. Additionally, the new stipulations on attorney's fees could also lead to debates about fair compensation for legal representation in debt collection cases.