(BOSTON 7/19/2025) — Yesterday, the Massachusetts Senate unanimously passed the Debt Collection Fairness Act to protect consumers and keep people from being pushed into financial ruin if they are sued for financial debt. The new law would make debt collection practices fairer, protect wages, and make clear that no person can be imprisoned for unpaid consumer debt.

The legislation, S.2537, would strengthen consumer protections to ensure that individuals can retain some financial security when they are sued for debts that are frequently old and potentially bought by debt collection companies for pennies on the dollar.

The bill would protect thousands of families across Massachusetts – including many in communities of color – by reducing the interest rate on consumer debt from 12% to 3%, exempting most wages and child support from garnishment, and establishing a five-year statute of limitations for legal claims.

The bill also prohibits employers from penalizing employees due to wage garnishment or personal debt, and adds further protections for individuals coping with financial hardship.

“This legislation represents a common-sense set of policies that will help families escape vicious cycles of debt faster so that they can get back to their lives,” said Senator Michael Moore (D-Millbury). “Predatory lenders and debt collectors have deliberately designed a system that can turn a small loan to bridge the gap between paychecks into thousands of dollars of crushing debt at extreme interest rates in the blink of an eye. The Senate is acting to break that cycle and create reasonable consumer protections for all Bay Staters.”

The legislation was reported out of the Joint Committee on Financial Services on June 20, 2025, and from the Senate Committee on Ways and Means on July 10, 2025. Votes of both committees are available online, along with a full summary of the legislation and a recording of the Senate’s livestreamed debate and vote on the bill.

Having passed the Senate, the bill now heads to the House of Representatives for consideration.

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