In the years since the Great Recession, the Attorney General’s office has received approximately 1,300 complaints a year about the growing debt collecting industry, according to a press release by State Senator James’ Eldridge’s office. Debt collectors often seek to collect money consumers do not owe, or make errors about the actual amount of money owed by borrowers.
On Wednesday, July 13, the Massachusetts Senate passed a bill to protect against the deceptive practices associated with the debt collection industry in Massachusetts, the release read. This new legislation aims to safeguard consumers against predatory debt collection techniques while allowing individuals to repay debt without experiencing financial hardship.
Under the Bill, S.2409, An Act Relative to Family Financial Protection, borrowers would maintain a baseline level of their own income for everyday expenses, which would allow consumers to repay their debt without unwarranted financial burden, the release read. The bill also terminates the practice of collecting debt after the consumer’s statute of limitation expires, and limits attorney’s fees and interest that may be recovered by creditors and debt collectors.
In addition, the number of warrants for arrest issued in debt collection lawsuits would be decreased, and debt collectors would be prohibited from pursuing court judgments on debts more than four years old, the release read. The bill would also decrease the period of time to begin collection on a court judgment from 20 years to five years.
According to Senate Committee on Ways and Means Chair Senator Karen E. Spilka (D-Ashland), abusive debt collection often negatively affects the most vulnerable citizens: the disabled and elderly, as well as those living below the poverty line, the release read. Senator Jamie Eldridge (D-Acton) hopes the legislation will ensure these susceptible populations have the ability to repay debts without finding themselves on the edge of financial ruin.
Senator Sal DiDomenico (D-Everett), Vice Chairman of the Senate Committee on Ways & Means, said in a statement that he is confident this new legislation will ensure that people struggling financially are protected from harassment and intimidation by collection agencies.
“Predatory debt collection practices undermine the financial security of many of the most vulnerable members of our Commonwealth,” Senator DiDomenico said. “People who are struggling with financial difficulties should not be subject to harassment and intimidation by collection agencies, and I am confident that this legislation will ensure that consumers are given the protection they need.”
The bill will now be considered by the Massachusetts House of Representatives, the release read.