Massachusetts 2025-2026 Regular Session

Massachusetts House Bill H1275 Compare Versions

Only one version of the bill is available at this time.

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1	1	1 of 1
2	2	HOUSE DOCKET, NO. 2405 FILED ON: 1/16/2025
3	3	HOUSE . . . . . . . . . . . . . . . No. 1275
4	4	The Commonwealth of Massachusetts
5	5	_________________
6	6	PRESENTED BY:
7	7	Tram T. Nguyen and Christine P. Barber
8	8	_________________
9	9	To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
10	10	Court assembled:
11	11	The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
12	12	An Act relative to fairness in debt collection.
13	13	_______________
14	14	PETITION OF:
15	15	NAME:DISTRICT/ADDRESS :DATE ADDED:Tram T. Nguyen18th Essex1/16/2025Christine P. Barber34th Middlesex1/16/2025Attorney General Andrea Joy
16	16	Campbell
17	17	One Ashburton Place Boston, MA
18	18	02108
19	19	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
20	20	HOUSE DOCKET, NO. 2405 FILED ON: 1/16/2025
21	21	HOUSE . . . . . . . . . . . . . . . No. 1275
22	22	By Representatives Nguyen of Andover and Barber of Somerville, a petition (accompanied by
23	23	bill, House, No. 1275) of Tram T. Nguyen, Christine P. Barber and others relative to the
24	24	collection of consumer debt. Financial Services.
25	25	The Commonwealth of Massachusetts
26	26	_______________
27	27	In the One Hundred and Ninety-Fourth General Court
28	28	(2025-2026)
29	29	_______________
30	30	An Act relative to fairness in debt collection.
31	31	Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
32	32	of the same, as follows:
33	33	1 SECTION 1. The General Laws are hereby amended by inserting after chapter 93L the
34	34	2following chapter:-
35	35	3 CHAPTER 93M.
36	36	4 DEBT COLLECTION FAIRNESS ACT.
37	37	5 Section 1. As used in this chapter, the following words shall have the following meanings
38	38	6unless the context clearly requires otherwise:
39	39	7 “Charge-off”, a declaration by a creditor that a delinquent consumer loan, consumer
40	40	8credit account or other consumer debt has been removed from a creditor’s books as an asset and
41	41	9treated as a loss or expense.
42	42	10 “Consumer”, a natural person. 2 of 10
43	43	11 “Consumer form contract”, a contract in writing between a business and a consumer
44	44	12involving goods or services, including, but not limited to, credit or financial services, primarily
45	45	13for personal, family or household purposes, that has been drafted by the business for use with
46	46	14more than 1 consumer, unless the only other consumer is the spouse of the first consumer.
47	47	15 “Consumer debt”, an obligation or alleged obligation of a consumer to pay money arising
48	48	16out of a transaction in which the money, property, insurance or services that are the subject of the
49	49	17transaction are primarily for personal, family or household purposes, whether or not the
50	50	18obligation has been reduced to judgment; provided, however, that “consumer debt” shall not
51	51	19include a common expense or charge levied under chapters 183A or 183B,an obligation or
52	52	20alleged obligation to pay common expenses or charges levied pursuant to a covenant or
53	53	21agreement running with the land or a residential mortgage loan.
54	54	22 “Creditor”, a person or entity to whom a debt is owed, including a judgment creditor and
55	55	23any other person or entity that obtains an execution on a debt; provided, however, that “creditor”
56	56	24shall not include an organization of unit owners as defined in section 1 of chapter 183A, a time-
57	57	25share association under chapter 183B or a homeowner association or entity to whom debt is
58	58	26owed pursuant to a covenant or agreement running with the land.
59	59	27 “Debt buyer”, a person or entity that is engaged in the business of purchasing delinquent
60	60	28or charged-off consumer loans, consumer credit accounts or other delinquent consumer debt for
61	61	29collection purposes, whether the person or entity collects the debt itself or hires a third party for
62	62	30collection or an attorney for litigation in order to collect the debt.
63	63	31 “Debt collector”, a person or entity that uses an instrumentality of interstate commerce or
64	64	32the mails in any business the principal purpose of which is the collection of a debt, or who 3 of 10
65	65	33regularly collects or attempts to collect, directly or indirectly, a debt owed or due or asserted to
66	66	34be owed or due another.
67	67	35 “Earnings”, gross compensation paid or payable for personal services, whether
68	68	36denominated as wages, salary, commission, bonus, payment for skilled, personal or professional
69	69	37services or otherwise, and whether earned as an employee or independent contractor.
70	70	38 “Execution”, an attachment, levy, garnishment or other disablement, freeze or seizure of
71	71	39property, whether pre-judgment or post-judgment, to satisfy a debt or a creditor’s exercise of a
72	72	40right of setoff to collect a debt; provided, however, that "execution” shall not include self-help
73	73	41repossession of collateral.
74	74	42 “Exempt”, not subject to execution, levy, attachment, garnishment, setoff, self-help,
75	75	43disablement, freeze, seizure or other form of process, court order, creditor or other action for
76	76	44debt collection or restitution or other equitable claim unless otherwise specified.
77	77	45 “Garnishment”, a legal or equitable procedure through which the earnings, property or
78	78	46funds of a person are required by a court of competent jurisdiction to be withheld by another
79	79	47entity for payment of a debt to a creditor.
80	80	48 “Residential mortgage loan” a loan primarily for personal, family, or household use that
81	81	49is secured by a mortgage, deed of trust or other equivalent consensual security interest on a
82	82	50dwelling as defined in 15 U.S.C. section 1602(w) or residential real estate upon which is
83	83	51constructed or intended to be constructed a dwelling as so defined.
84	84	52 “Trustee”, a trustee served pursuant to chapter 246. 4 of 10
85	85	53 Section 2. (a) Notwithstanding section 34 of chapter 235, if a consumer’s earnings are
86	86	54attached to satisfy a judgment for collection of a consumer debt, wages equal to the greater of 90
87	87	55per cent of the debtor's gross weekly wages or 65 times the greater of the federal minimum
88	88	56hourly wage under 29 U.S.C. section 206(a)(1) or the state minimum hourly wage under section
89	89	571 of chapter 151 in effect at the time shall be exempt from the attachment and not subject to
90	90	58garnishment. This exemption shall be adjusted pro rata for a pay period that is more than weekly.
91	91	59 (b) Notwithstanding subsection (a), a consumer debtor subject to a judgement for
92	92	60collection of a consumer debt may seek to exempt additional wages from attachment by filing a
93	93	61form making a claim of undue financial hardship with the court. Such form shall be prepared by
94	94	62the court to allow a consumer debtor to readily identify the basis for the consumer debtor’s
95	95	63request for an additional exemption under this subsection. Upon the filing of the financial
96	96	64hardship form, the court shall hold a hearing as soon as practicable to determine the total amount
97	97	65that shall be exempted from the judgment debtors’ wages.
98	98	66 (c) If more than 1 order of attachment for a consumer debt is served on a trustee with
99	99	67respect to the same consumer, the order of attachment served the earliest shall take priority. If an
100	100	68order of attachment with greater priority consumes the entirety of the earnings that is available
101	101	69for garnishment under the preceding subsections, the consumer’s earnings shall not be garnished
102	102	70pursuant to the order of attachment with lower priority.
103	103	71 (d) The protections for earnings under this section apply to consumers whose physical
104	104	72place of employment is in the commonwealth; provided, however, that such protections shall
105	105	73continue to apply even if such consumer’s employer has corporate offices or other places of
106	106	74business located outside the commonwealth. 5 of 10
107	107	75 (e) This section shall not apply in a proceeding to attach earnings or a pension to satisfy a
108	108	76divorce, separate maintenance or child support order of a court of competent jurisdiction and, in
109	109	77such a proceeding, including an action for trustee process to enforce a support order under
110	110	78section 36A of chapter 208, federal law limiting the amounts that may be trusteed, assigned or
111	111	79attached in order to satisfy an alimony, maintenance or child support order shall apply.
112	112	80 (f) Except as otherwise permitted by law, an amount held by a trustee for a defendant in a
113	113	81pension, as defined in section 28 of chapter 246, shall be reserved in the hands of the trustee and
114	114	82shall be exempt from attachment to satisfy a judgment for collection of a consumer debt.
115	115	83 (g) An employer shall not take adverse employment action against an employee or refuse
116	116	84to hire an individual because of 1 or more garnishments for consumer debts or because of
117	117	85obligations that any garnishments impose against the employer. An employer who violates this
118	118	86section shall be liable in a civil action, action for contempt or other appropriate proceeding to the
119	119	87employee or individual for the wages and employment benefits lost by the employee or
120	120	88individual from the time of the adverse employment action or refusal to hire to the period of
121	121	89reinstatement and an additional penalty of not more than $1,000.
122	122	90 (h) Income from child support payments shall be exempt from collection under this
123	123	91chapter.
124	124	92 Section 3. (a) Notwithstanding section 2 of chapter 260, an action for the collection of a
125	125	93consumer debt shall be commenced not more than 5 years after the cause of action accrues.
126	126	94Notwithstanding any applicable statute of limitations of the commonwealth or other jurisdiction,
127	127	95said limitations period shall apply to a claim for a consumer debt, whether the claim sounds in
128	128	96contract, account stated, open account, contract or instrument under seal or other basis. 6 of 10
129	129	97 (b) Notwithstanding section 14 of chapter 260, a payment on a consumer debt that is
130	130	98made before or after the limitations period under subsection (a) has expired shall not revive or
131	131	99extend the limitations period or bar the consumer from asserting a defense to the collection of a
132	132	100consumer debt.
133	133	101 (c) No creditor, debt buyer or debt collector shall bring a suit or initiate an arbitration or
134	134	102other legal proceeding to collect a consumer debt if the applicable limitations period under
135	135	103subsection (a) has expired.
136	136	104 (d) A waiver by a consumer of a protection or right under this section shall be void and
137	137	105unenforceable.
138	138	106 (e) Notwithstanding section 20 of chapter 260 or any other general or special law to the
139	139	107contrary, an action for the collection of a consumer debt arising from a judgment or decree,
140	140	108including an execution upon or trustee process based on said judgment or decree and other
141	141	109activity to collect on the judgment, shall be commenced not more than 10 years after the entry of
142	142	110said judgment or decree. If such an action has commenced within 10 years, said judgment or
143	143	111decree may be renewed one time for 10 years. A judgment or decree shall not be revived or
144	144	112renewed after the limitations period under this subsection has expired.
145	145	113 Section 4. (a) A plaintiff who has obtained a judgment on a claim for the collection of a
146	146	114consumer debt shall provide written notice to the consumer debtor not less than 30 days prior to
147	147	115a supplementary process in a civil action for the examination of said consumer debtor pursuant to
148	148	116section 14 of chapter 224 or a payment review hearing in a small claims action pursuant to
149	149	117Uniform Small Claims Rule 7(i). Such notice shall inform the consumer debtor of the
150	150	118opportunity to submit a financial affidavit in a form prescribed by the court and signed under the 7 of 10
151	151	119penalties of perjury. If the consumer debtor indicates through the financial affidavit that all
152	152	120income and assets are exempt from collection and files the affidavit as prescribed by the court,
153	153	121the court shall acknowledge receipt and inform both parties that the supplementary process or
154	154	122payment review hearing shall not occur. Upon filing of said affidavit, no further supplementary
155	155	123proceedings or payment review hearings shall be scheduled unless the judgment creditor presents
156	156	124evidence of the judgment debtor’s non-exempt assets or income and the court determines that
157	157	125there is a reasonable basis to believe that there are non-exempt assets or income warranting the
158	158	126scheduling of a new supplementary process or payment review hearing.
159	159	127 (b) Notwithstanding sections 18 and 20 of chapter 224 or any other applicable law, rule,
160	160	128or regulation to the contrary, no capias or other warrant to compel the attendance of an alleged
161	161	129consumer debtor shall be issued for failure of the alleged consumer debtor to appear at a
162	162	130supplementary process in a civil action for an examination pursuant to section 14 of chapter 224
163	163	131or a payment review hearing in a small claims action pursuant to Uniform Small Claims Rule
164	164	1327(i). If the alleged consumer debtor fails to appear, the court shall schedule a show cause hearing
165	165	133to determine whether a capias or other warrant to compel the attendance of the alleged consumer
166	166	134debtor should be issued. No capias or other warrant shall be issued to compel the attendance of
167	167	135the alleged consumer debtor at a show cause hearing without evidence that notice of the said
168	168	136hearing was served on the consumer either by signed return receipt or by a sworn return of
169	169	137service.
170	170	138 (c) Notwithstanding sections 18 and 20 of chapter 224 or any other applicable law, rule or
171	171	139regulation to the contrary, an alleged consumer debtor that is compelled to attend pursuant to a
172	172	140capias or other warrant shall be brought before the court the same day. The consumer shall be
173	173	141given the opportunity to complete the financial affidavit described in subsection (a). The capias 8 of 10
174	174	142or other warrant shall be satisfied by the consumer’s appearance in court or completion of the
175	175	143financial affidavit indicating that all forms of income and assets are exempt.
176	176	144 (d) Notwithstanding sections 18 and 20 of chapter 224 or any other applicable law, rule
177	177	145or regulation to the contrary, no person shall be imprisoned or jailed for failure to pay a
178	178	146consumer debt, nor shall a person be imprisoned or jailed for contempt of or failure to comply
179	179	147with a court order to pay a consumer debt in part or in full.
180	180	148 Section 5. (a) Except as provided in subsection (b), if a plaintiff prevails in an action to
181	181	149collect a consumer debt, interest computed pursuant to section 6C of chapter 231 or section 8
182	182	150chapter 235 shall be limited to a fixed rate of interest of 12 per cent per annum.
183	183	151 (b) For actions to collect a consumer debt, judgments entered on or after January 1, 2026,
184	184	152or where an application for renewal of judgment is filed on or after January 1, 2026, interest shall
185	185	153be limited to a fixed rate of 3 per cent per annum. Nothing in this subsection shall be construed
186	186	154to require any interest which accrued at a higher interest rate prior to January 1, 2026, to be re-
187	187	155calculated or reduced to the new 3 per cent rate. Judgments issued prior to January 1, 2026, with
188	188	156an interest rate other than 3 per cent per annum shall not be required to be amended or reissued
189	189	157by the courts.
190	190	158 (c) If the plaintiff prevails in an action to collect a consumer debt, the plaintiff may
191	191	159collect attorney’s fees only if the contract or other document evidencing the indebtedness sets
192	192	160forth an obligation of the consumer debtor to pay attorney’s fees; provided, however, that if the
193	193	161contract or other document evidencing indebtedness provides for attorney’s fees in some specific
194	194	162percentage, the provision and obligation shall be valid and enforceable for not more than 15 per
195	195	163cent of the amount of the debt excluding attorney’s fees and collection costs; provided further 9 of 10
196	196	164that if a contract or other document evidencing indebtedness provides for the payment of
197	197	165reasonable attorney’s fees by the consumer debtor, without specifying a specific percentage, the
198	198	166provision shall be construed to mean the lesser of 15 per cent of the amount of the debt,
199	199	167excluding attorney’s fees and collection costs, or the amount of attorney’s fees calculated by a
200	200	168reasonable rate for such cases multiplied by the amount of time reasonably expended to obtain
201	201	169the judgment; provided further, that the documentation setting forth a party’s obligation to pay
202	202	170attorney’s fees shall be provided to the court before a court may enforce those provisions; and
203	203	171provided further, that such documentation shall not include materials that the plaintiff has
204	204	172already filed together with the complaint in compliance with applicable court rules.
205	205	173 Section 6. (a) A violation of sections 2 to 5, inclusive, shall constitute a violation of
206	206	174chapter 93A.
207	207	175 (b) Any portion of a contract, including a consumer form contract, that violates sections 2
208	208	176to 5, inclusive, shall be void and unenforceable.
209	209	177 SECTION 2. Section 28 of chapter 246 of the General Laws, as appearing in the 2022
210	210	178Official Edition, is hereby amended by adding the following paragraph:- This section shall not
211	211	179apply in a proceeding to attach earnings or a pension to satisfy a judgment for collection of a
212	212	180consumer debt as defined in section 1 of chapter 93M, and in such an action, said chapter 93M
213	213	181shall apply.
214	214	182 SECTION 3. Section 3 of chapter 93M of the General Laws shall not apply to a
215	215	183consumer debt for which the cause of action accrued before January 1, 2026; provided, however,
216	216	184that subsection (b) of said section 3 of said chapter 93M shall apply to payments made after the
217	217	185effective date of this act; provided, further, that subsection (b) of section 6 of chapter 93M shall 10 of 10
218	218	186not apply to a contract, including a consumer form contract that is in effect before January 1,
219	219	1872026.
220	220	188 SECTION 4. This act shall take effect on January 1, 2026.