Bill > S2409

This bill, titled "Relative to family financial protection," establishes new protections for consumers in Massachusetts by creating Chapter 93L of the General Laws, the "Family Financial Protection Act," which takes effect on January 1, 2017. Key provisions include establishing exemptions for a portion of a debtor's earnings from garnishment for consumer debts, with specific rules for calculating the exempt amount and limiting garnishment to 10% of excess earnings, though these protections do not apply to child support or alimony orders. The bill also introduces a four-year statute of limitations for collecting consumer debts, meaning lawsuits must be filed within four years of the debt being "charged-off" (declared uncollectible by a creditor) or 180 days after the last payment to the original creditor, and payments or affirmations of debt after this period will not revive the debt or prevent a consumer from raising defenses. Furthermore, it limits the interest rate on judgments for consumer debts to a specific federal treasury yield, capped between 2% and 5% annually, and sets limits on attorney's fees that creditors can collect, generally no more than 15% of the debt, while allowing prevailing debtors to recover their attorney's fees. The bill also mandates that employers cannot take adverse action against employees due to garnishment for consumer debts and requires specific notice procedures for debtors in supplementary proceedings to determine if their income and assets are exempt from court-ordered payments. Finally, any contract provision violating these new protections is void, and the act does not apply to debts or contracts that existed before January 1, 2017, with some exceptions.