Bill
S 2551
Massachusetts enacts the Debt Collection Fairness Act, shielding consumers via higher wage-garnishment exemptions, hardship hearings, and clearer creditor rules.
Title: An Act relative to fairness in debt collection (adds Chapter 93M — “Debt Collection Fairness Act”)
Status: Signed into law (Ch. 467, 2025). Delivered to Governor Oct 9, 2025; signed Oct 16, 2025.
Purpose
- Establishes a new Chapter 93M in the Massachusetts General Laws to strengthen consumer protections in debt collection, particularly against wage garnishment and other executions on consumer debts, and to clarify roles/definitions for creditors, debt buyers, and debt collectors.
Key definitions (selected)
- “Consumer” — a natural person.
- “Consumer debt” — obligation arising from transactions primarily for personal, family, or household purposes (excludes certain condominium/association common expenses and residential mortgage loans).
- “Debt buyer” — entity buying delinquent or charged-off consumer debts for collection.
- “Debt collector” — entity whose principal purpose is debt collection or that regularly collects debts for others.
- “Earnings,” “Execution,” “Garnishment,” “Exempt,” and related terms are defined for application across the chapter.
Major provisions and changes
- Strong wage-garnishment exemption (Section 2(a)):
- If a consumer’s earnings are attached to satisfy a judgment for consumer debt, wages equal to the greater of:
- 90% of the debtor’s gross weekly wages; or
- 65 times the greater of (a) the federal minimum hourly wage (29 U.S.C. §206(a)(1)) or (b) the Massachusetts state minimum hourly wage (G.L. c.151, §1) in effect at the time of attachment,
- are exempt from attachment and not subject to garnishment. For pay periods longer than weekly, the exemption is adjusted pro rata.
- Undue financial hardship process (Section 2(b)):
- A debtor may file a court-prepared “financial hardship” claim form to request additional wage exemptions.
- The court must hold a hearing as soon as practicable to determine the total exempt amount.
- Priority among multiple attachments (Section 2(c)):
- Where multiple attachments/orders are served on a trustee for the same consumer, the earliest-served attachment has priority. If a higher-priority order consumes all available garnishable earnings, later orders are not collectible.
- Geographic scope (Section 2(d)):
- Protections apply to consumers whose physical place of employment is in Massachusetts, even if their employer’s corporate offices are out of state.
- Exclusions (Section 2(e)):
- Does not apply to proceedings enforcing divorce, separate maintenance, or child support orders — federal limits on attachment for support obligations apply.
- Pension protections (Section 2(f)):
- Amounts held by a trustee for a defendant in a pension (G.L. c.246, §28) shall be reserved and exempt from attachment to satisfy consumer debt judgments, except as otherwise provided by law.
- Employer protections (start of Section 2(g) — truncated in provided text):
- Employers are prohibited from taking adverse employment action or refusing to hire because of one or more garnishments for consumer debts or the obligations such garnishments impose on the employer (full statutory text truncated).
Scope and exclusions
- Applies to consumer debts as defined (personal, family, household uses).
- Excludes certain obligations such as common expenses under chapters 183A/183B and most residential mortgage loans.
- Support and family-law enforced obligations remain governed by child support/alimony rules.
Who is affected
- Consumers (debtors) in Massachusetts — stronger protections for earnings and pensions against collection.
- Creditors, debt buyers, and debt collectors — reduced access to wage garnishment recovery; will need to adjust collection practices and litigation strategies.
- Employers — limited ability to take adverse employment actions related to employee garnishments and potential administrative responsibilities when multiple attachments are received.
- Courts and trustees — new procedures for hardship hearings and priority determinations.
Procedural/timeline notes
- Bill actions (selected): introduced and reported in mid‑2025, amended/substituted (S.2551 substituted for S.2537), passed both legislative chambers earlier in 2025, delivered to Governor Oct 9, 2025, signed Oct 16, 2025 (Chapter 467, 2025).
- Companion/related bills include A.3858 (companion) and several prior-session measures on debt-collection issues.
Potential impacts (practical effects)
- Likely reduces the portion of wages collectible via garnishment for consumer debt judgments, increasing disposable income retained by debtors.
- May incentivize creditors to pursue other collection methods (settlements, litigation) or change underwriting/reserve practices for charged-off accounts.
- Could increase court caseload for hardship exemption hearings.
- Employers may face additional administrative burdens and legal constraints regarding responding to multiple garnishments.
Notes
- Provided bill text was truncated; additional protections, prohibitions, or enforcement mechanisms may appear elsewhere in the enacted chapter. This summary highlights the principal provisions found in the available text (notably Section 2 and the statutory definitions) and the bill’s legislative history through enactment as Chapter 467 (2025).
Compiled from official sources — confirm details with the bill’s official record.
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