Bill > S2551

This bill establishes the Debt Collection Fairness Act to provide enhanced protections for consumers in debt collection proceedings. The legislation defines key terms like "consumer debt" and sets clear limitations on debt collection practices. It restricts wage garnishment by ensuring that at least 90% of a consumer's weekly wages or an amount based on minimum wage remains exempt, and allows consumers to seek additional exemptions if they can prove undue financial hardship. The bill also significantly shortens the statute of limitations for debt collection, limiting legal actions to 5 years after the cause of action accrues and 10 years for judgments. Additionally, the legislation prevents debt collectors from issuing warrants or imprisoning consumers for failure to pay consumer debts, caps interest rates at 12% or 3% depending on the type of action, and limits attorney's fees to no more than 15% of the debt amount. The bill includes provisions protecting employees from adverse employment actions related to garnishments and ensures that consumers cannot waive these protections. Notably, most provisions will take effect on January 1, 2026, with some specific exceptions for existing debts and contracts.

Senate Committee on Ways and Means (Senate)

https://malegislature.gov/Bills/194/S2551