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HOUSE DOCKET, NO. 2405 FILED ON: 1/16/2025
HOUSE . . . . . . . . . . . . . . . No. 1275
The Commonwealth of Massachusetts
_________________
PRESENTED BY:
Tram T. Nguyen and Christine P. Barber
_________________
To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:
The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
An Act relative to fairness in debt collection.
_______________
PETITION OF:
NAME:DISTRICT/ADDRESS :DATE ADDED:Tram T. Nguyen18th Essex1/16/2025Christine P. Barber34th Middlesex1/16/2025Attorney General Andrea Joy
Campbell
One Ashburton Place Boston, MA
02108
1/16/2025Carmine Lawrence Gentile13th Middlesex1/21/2025Kristin E. Kassner2nd Essex1/22/2025Patrick Joseph Kearney4th Plymouth2/3/2025Sally P. Kerans13th Essex1/21/2025David Henry Argosky LeBoeuf17th Worcester2/10/2025 1 of 10
HOUSE DOCKET, NO. 2405 FILED ON: 1/16/2025
HOUSE . . . . . . . . . . . . . . . No. 1275
By Representatives Nguyen of Andover and Barber of Somerville, a petition (accompanied by
bill, House, No. 1275) of Tram T. Nguyen, Christine P. Barber and others relative to the
collection of consumer debt. Financial Services.
The Commonwealth of Massachusetts
_______________
In the One Hundred and Ninety-Fourth General Court
(2025-2026)
_______________
An Act relative to fairness in debt collection.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
of the same, as follows:
1 SECTION 1. The General Laws are hereby amended by inserting after chapter 93L the
2following chapter:-
3 CHAPTER 93M.
4 DEBT COLLECTION FAIRNESS ACT.
5 Section 1. As used in this chapter, the following words shall have the following meanings
6unless the context clearly requires otherwise:
7 “Charge-off”, a declaration by a creditor that a delinquent consumer loan, consumer
8credit account or other consumer debt has been removed from a creditor’s books as an asset and
9treated as a loss or expense.
10 “Consumer”, a natural person. 2 of 10
11 “Consumer form contract”, a contract in writing between a business and a consumer
12involving goods or services, including, but not limited to, credit or financial services, primarily
13for personal, family or household purposes, that has been drafted by the business for use with
14more than 1 consumer, unless the only other consumer is the spouse of the first consumer.
15 “Consumer debt”, an obligation or alleged obligation of a consumer to pay money arising
16out of a transaction in which the money, property, insurance or services that are the subject of the
17transaction are primarily for personal, family or household purposes, whether or not the
18obligation has been reduced to judgment; provided, however, that “consumer debt” shall not
19include a common expense or charge levied under chapters 183A or 183B,an obligation or
20alleged obligation to pay common expenses or charges levied pursuant to a covenant or
21agreement running with the land or a residential mortgage loan.
22 “Creditor”, a person or entity to whom a debt is owed, including a judgment creditor and
23any other person or entity that obtains an execution on a debt; provided, however, that “creditor”
24shall not include an organization of unit owners as defined in section 1 of chapter 183A, a time-
25share association under chapter 183B or a homeowner association or entity to whom debt is
26owed pursuant to a covenant or agreement running with the land.
27 “Debt buyer”, a person or entity that is engaged in the business of purchasing delinquent
28or charged-off consumer loans, consumer credit accounts or other delinquent consumer debt for
29collection purposes, whether the person or entity collects the debt itself or hires a third party for
30collection or an attorney for litigation in order to collect the debt.
31 “Debt collector”, a person or entity that uses an instrumentality of interstate commerce or
32the mails in any business the principal purpose of which is the collection of a debt, or who 3 of 10
33regularly collects or attempts to collect, directly or indirectly, a debt owed or due or asserted to
34be owed or due another.
35 “Earnings”, gross compensation paid or payable for personal services, whether
36denominated as wages, salary, commission, bonus, payment for skilled, personal or professional
37services or otherwise, and whether earned as an employee or independent contractor.
38 “Execution”, an attachment, levy, garnishment or other disablement, freeze or seizure of
39property, whether pre-judgment or post-judgment, to satisfy a debt or a creditor’s exercise of a
40right of setoff to collect a debt; provided, however, that "execution” shall not include self-help
41repossession of collateral.
42 “Exempt”, not subject to execution, levy, attachment, garnishment, setoff, self-help,
43disablement, freeze, seizure or other form of process, court order, creditor or other action for
44debt collection or restitution or other equitable claim unless otherwise specified.
45 “Garnishment”, a legal or equitable procedure through which the earnings, property or
46funds of a person are required by a court of competent jurisdiction to be withheld by another
47entity for payment of a debt to a creditor.
48 “Residential mortgage loan” a loan primarily for personal, family, or household use that
49is secured by a mortgage, deed of trust or other equivalent consensual security interest on a
50dwelling as defined in 15 U.S.C. section 1602(w) or residential real estate upon which is
51constructed or intended to be constructed a dwelling as so defined.
52 “Trustee”, a trustee served pursuant to chapter 246. 4 of 10
53 Section 2. (a) Notwithstanding section 34 of chapter 235, if a consumer’s earnings are
54attached to satisfy a judgment for collection of a consumer debt, wages equal to the greater of 90
55per cent of the debtor's gross weekly wages or 65 times the greater of the federal minimum
56hourly wage under 29 U.S.C. section 206(a)(1) or the state minimum hourly wage under section
571 of chapter 151 in effect at the time shall be exempt from the attachment and not subject to
58garnishment. This exemption shall be adjusted pro rata for a pay period that is more than weekly.
59 (b) Notwithstanding subsection (a), a consumer debtor subject to a judgement for
60collection of a consumer debt may seek to exempt additional wages from attachment by filing a
61form making a claim of undue financial hardship with the court. Such form shall be prepared by
62the court to allow a consumer debtor to readily identify the basis for the consumer debtor’s
63request for an additional exemption under this subsection. Upon the filing of the financial
64hardship form, the court shall hold a hearing as soon as practicable to determine the total amount
65that shall be exempted from the judgment debtors’ wages.
66 (c) If more than 1 order of attachment for a consumer debt is served on a trustee with
67respect to the same consumer, the order of attachment served the earliest shall take priority. If an
68order of attachment with greater priority consumes the entirety of the earnings that is available
69for garnishment under the preceding subsections, the consumer’s earnings shall not be garnished
70pursuant to the order of attachment with lower priority.
71 (d) The protections for earnings under this section apply to consumers whose physical
72place of employment is in the commonwealth; provided, however, that such protections shall
73continue to apply even if such consumer’s employer has corporate offices or other places of
74business located outside the commonwealth. 5 of 10
75 (e) This section shall not apply in a proceeding to attach earnings or a pension to satisfy a
76divorce, separate maintenance or child support order of a court of competent jurisdiction and, in
77such a proceeding, including an action for trustee process to enforce a support order under
78section 36A of chapter 208, federal law limiting the amounts that may be trusteed, assigned or
79attached in order to satisfy an alimony, maintenance or child support order shall apply.
80 (f) Except as otherwise permitted by law, an amount held by a trustee for a defendant in a
81pension, as defined in section 28 of chapter 246, shall be reserved in the hands of the trustee and
82shall be exempt from attachment to satisfy a judgment for collection of a consumer debt.
83 (g) An employer shall not take adverse employment action against an employee or refuse
84to hire an individual because of 1 or more garnishments for consumer debts or because of
85obligations that any garnishments impose against the employer. An employer who violates this
86section shall be liable in a civil action, action for contempt or other appropriate proceeding to the
87employee or individual for the wages and employment benefits lost by the employee or
88individual from the time of the adverse employment action or refusal to hire to the period of
89reinstatement and an additional penalty of not more than $1,000.
90 (h) Income from child support payments shall be exempt from collection under this
91chapter.
92 Section 3. (a) Notwithstanding section 2 of chapter 260, an action for the collection of a
93consumer debt shall be commenced not more than 5 years after the cause of action accrues.
94Notwithstanding any applicable statute of limitations of the commonwealth or other jurisdiction,
95said limitations period shall apply to a claim for a consumer debt, whether the claim sounds in
96contract, account stated, open account, contract or instrument under seal or other basis. 6 of 10
97 (b) Notwithstanding section 14 of chapter 260, a payment on a consumer debt that is
98made before or after the limitations period under subsection (a) has expired shall not revive or
99extend the limitations period or bar the consumer from asserting a defense to the collection of a
100consumer debt.
101 (c) No creditor, debt buyer or debt collector shall bring a suit or initiate an arbitration or
102other legal proceeding to collect a consumer debt if the applicable limitations period under
103subsection (a) has expired.
104 (d) A waiver by a consumer of a protection or right under this section shall be void and
105unenforceable.
106 (e) Notwithstanding section 20 of chapter 260 or any other general or special law to the
107contrary, an action for the collection of a consumer debt arising from a judgment or decree,
108including an execution upon or trustee process based on said judgment or decree and other
109activity to collect on the judgment, shall be commenced not more than 10 years after the entry of
110said judgment or decree. If such an action has commenced within 10 years, said judgment or
111decree may be renewed one time for 10 years. A judgment or decree shall not be revived or
112renewed after the limitations period under this subsection has expired.
113 Section 4. (a) A plaintiff who has obtained a judgment on a claim for the collection of a
114consumer debt shall provide written notice to the consumer debtor not less than 30 days prior to
115a supplementary process in a civil action for the examination of said consumer debtor pursuant to
116section 14 of chapter 224 or a payment review hearing in a small claims action pursuant to
117Uniform Small Claims Rule 7(i). Such notice shall inform the consumer debtor of the
118opportunity to submit a financial affidavit in a form prescribed by the court and signed under the 7 of 10
119penalties of perjury. If the consumer debtor indicates through the financial affidavit that all
120income and assets are exempt from collection and files the affidavit as prescribed by the court,
121the court shall acknowledge receipt and inform both parties that the supplementary process or
122payment review hearing shall not occur. Upon filing of said affidavit, no further supplementary
123proceedings or payment review hearings shall be scheduled unless the judgment creditor presents
124evidence of the judgment debtor’s non-exempt assets or income and the court determines that
125there is a reasonable basis to believe that there are non-exempt assets or income warranting the
126scheduling of a new supplementary process or payment review hearing.
127 (b) Notwithstanding sections 18 and 20 of chapter 224 or any other applicable law, rule,
128or regulation to the contrary, no capias or other warrant to compel the attendance of an alleged
129consumer debtor shall be issued for failure of the alleged consumer debtor to appear at a
130supplementary process in a civil action for an examination pursuant to section 14 of chapter 224
131or a payment review hearing in a small claims action pursuant to Uniform Small Claims Rule
1327(i). If the alleged consumer debtor fails to appear, the court shall schedule a show cause hearing
133to determine whether a capias or other warrant to compel the attendance of the alleged consumer
134debtor should be issued. No capias or other warrant shall be issued to compel the attendance of
135the alleged consumer debtor at a show cause hearing without evidence that notice of the said
136hearing was served on the consumer either by signed return receipt or by a sworn return of
137service.
138 (c) Notwithstanding sections 18 and 20 of chapter 224 or any other applicable law, rule or
139regulation to the contrary, an alleged consumer debtor that is compelled to attend pursuant to a
140capias or other warrant shall be brought before the court the same day. The consumer shall be
141given the opportunity to complete the financial affidavit described in subsection (a). The capias 8 of 10
142or other warrant shall be satisfied by the consumer’s appearance in court or completion of the
143financial affidavit indicating that all forms of income and assets are exempt.
144 (d) Notwithstanding sections 18 and 20 of chapter 224 or any other applicable law, rule
145or regulation to the contrary, no person shall be imprisoned or jailed for failure to pay a
146consumer debt, nor shall a person be imprisoned or jailed for contempt of or failure to comply
147with a court order to pay a consumer debt in part or in full.
148 Section 5. (a) Except as provided in subsection (b), if a plaintiff prevails in an action to
149collect a consumer debt, interest computed pursuant to section 6C of chapter 231 or section 8
150chapter 235 shall be limited to a fixed rate of interest of 12 per cent per annum.
151 (b) For actions to collect a consumer debt, judgments entered on or after January 1, 2026,
152or where an application for renewal of judgment is filed on or after January 1, 2026, interest shall
153be limited to a fixed rate of 3 per cent per annum. Nothing in this subsection shall be construed
154to require any interest which accrued at a higher interest rate prior to January 1, 2026, to be re-
155calculated or reduced to the new 3 per cent rate. Judgments issued prior to January 1, 2026, with
156an interest rate other than 3 per cent per annum shall not be required to be amended or reissued
157by the courts.
158 (c) If the plaintiff prevails in an action to collect a consumer debt, the plaintiff may
159collect attorney’s fees only if the contract or other document evidencing the indebtedness sets
160forth an obligation of the consumer debtor to pay attorney’s fees; provided, however, that if the
161contract or other document evidencing indebtedness provides for attorney’s fees in some specific
162percentage, the provision and obligation shall be valid and enforceable for not more than 15 per
163cent of the amount of the debt excluding attorney’s fees and collection costs; provided further 9 of 10
164that if a contract or other document evidencing indebtedness provides for the payment of
165reasonable attorney’s fees by the consumer debtor, without specifying a specific percentage, the
166provision shall be construed to mean the lesser of 15 per cent of the amount of the debt,
167excluding attorney’s fees and collection costs, or the amount of attorney’s fees calculated by a
168reasonable rate for such cases multiplied by the amount of time reasonably expended to obtain
169the judgment; provided further, that the documentation setting forth a party’s obligation to pay
170attorney’s fees shall be provided to the court before a court may enforce those provisions; and
171provided further, that such documentation shall not include materials that the plaintiff has
172already filed together with the complaint in compliance with applicable court rules.
173 Section 6. (a) A violation of sections 2 to 5, inclusive, shall constitute a violation of
174chapter 93A.
175 (b) Any portion of a contract, including a consumer form contract, that violates sections 2
176to 5, inclusive, shall be void and unenforceable.
177 SECTION 2. Section 28 of chapter 246 of the General Laws, as appearing in the 2022
178Official Edition, is hereby amended by adding the following paragraph:- This section shall not
179apply in a proceeding to attach earnings or a pension to satisfy a judgment for collection of a
180consumer debt as defined in section 1 of chapter 93M, and in such an action, said chapter 93M
181shall apply.
182 SECTION 3. Section 3 of chapter 93M of the General Laws shall not apply to a
183consumer debt for which the cause of action accrued before January 1, 2026; provided, however,
184that subsection (b) of said section 3 of said chapter 93M shall apply to payments made after the
185effective date of this act; provided, further, that subsection (b) of section 6 of chapter 93M shall 10 of 10
186not apply to a contract, including a consumer form contract that is in effect before January 1,
1872026.
188 SECTION 4. This act shall take effect on January 1, 2026.