BOSTON (State House News Service) — The Senate next week plans to vote on a bill designed to install new protections around debt collection practices.
The legislation cleared the Senate last session but died in the House Ways and Means Committee. The Senate will take up the bill on Thursday, July 17.
The Senate Ways and Means Committee polled a redraft (S 2551) of legislation (S 2537) that would expand the amount of an individual’s paycheck that is shielded from wage garnishment, establish a five-year statute of limitations on debt collection, and limit the interest rate to 3% on judgments on consumer debt.
The proposal, sponsored by Sens. Jamie Eldridge, Michael Barrett and Joan Lovely and Attorney General Andrea Campbell, would also block debt collectors from suing individuals or initiating other legal proceedings once that limitation period has expired.
The Senate passed the bill last session on March 28, 2024.
“This bill aims to implement stricter regulations on debt collectors in order to prevent financial mistreatment of Massachusetts residents,” Eldridge said in a statement at the time. “It seeks to safeguard consumers’ economic security during debt repayment, prohibit excessively high interest rates, and eliminate the possibility of consumers being sent to ‘debtor’s prison’ when facing legal action.”
The refiled proposal would update “several long out-of-date consumer protections ensuring that people aren’t pushed over a financial precipice when they are sued for debts that are often old,” according to a summary from Eldridge’s office.
Quicker action on the bill this session reflects recently adopted joint rules reforms, as out-numbered Senate members on joint committees are now able to separately vote on bills originating from their branch.
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