SENATE DOCKET, NO. 1769        FILED ON: 1/16/2015

SENATE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 146


The Commonwealth of Massachusetts



James B. Eldridge


To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:

The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:

An Act relative to family financial protection.






James B. Eldridge

Middlesex and Worcester

Chris Walsh

6th Middlesex

Denise Provost

27th Middlesex

Jason M. Lewis

Fifth Middlesex

Peter V. Kocot

1st Hampshire

Jennifer E. Benson

37th Middlesex

Cory Atkins

14th Middlesex

Mary S. Keefe

15th Worcester

Marjorie C. Decker

25th Middlesex

Carolyn C. Dykema

8th Middlesex

Daniel M. Donahue

16th Worcester

Patricia D. Jehlen

Second Middlesex

James J. O'Day

14th Worcester

Christine P. Barber

34th Middlesex

Brian A. Joyce

Norfolk, Bristol and Plymouth

David M. Rogers

24th Middlesex

Paul McMurtry

11th Norfolk

Benjamin Swan

11th Hampden

Sal N. DiDomenico

Middlesex and Suffolk

Michelle M. DuBois

10th Plymouth

SENATE DOCKET, NO. 1769        FILED ON: 1/16/2015

SENATE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 146

By Mr. Eldridge, a petition (accompanied by bill, Senate, No. 146) of James B. Eldridge, Chris Walsh, Denise Provost, Jason M. Lewis and other members of the General Court for legislation relative to family financial protection.  Consumer Protection and Professional Licensure.


The Commonwealth of Massachusetts



In the One Hundred and Eighty-Ninth General Court



An Act relative to family financial protection.


Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

SECTION 1. The General Laws are hereby amended by inserting after chapter 93J the following chapter:-



Section 1.  Title and Scope

(a) This Act shall be known and cited as the "Family Financial Protection Act.”  This Act shall be liberally and remedially construed to effectuate its purpose.  The purpose of the Act is to protect consumers, and this Act is to be construed as a consumer protection statute for all purposes. 

(b) No business (including any officer, agent, employee, or representative) may individually or in conjunction or cooperation with another solicit the execution of, receive, or rely upon a consumer form contract, including reliance upon the contract as a basis for a suit or claim, unless the person has complied with the provisions of this Act and the contract is in compliance with this Act.  The provisions of this Act shall apply to, inter alia, any person who attempts to evade its applicability by any device, subterfuge, or pretense whatsoever.

(c) Should a court decide that any provision of this Act is unconstitutional, preempted, or otherwise invalid, that provision shall be severed and such decision shall not affect the validity of the Act other than the part severed.

Section 2.  Definitions

As used in this chapter, the following words shall, unless the context clearly indicates a different meaning, have the following meanings:

“Consumer” means a natural person.

“Consumer form contract” means a contract in writing between a business and a consumer involving goods or services, including, but not limited to, credit or financial services, primarily for personal, family, or household purposes, which contract has been drafted by the business for use with more than one consumer, unless a second consumer is the spouse of the first consumer.

“Consumer debt” means any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment.

“Creditor” is a person to whom a debt is owed and includes a judgment creditor and any other person that obtains an execution on a debt. 

“Debt buyer” means a person or entity that is engaged in the business of purchasing delinquent or charged-off consumer loans or consumer credit accounts, or other delinquent consumer debt for collection purposes, whether it collects the debt itself or hires a third party for collection or an attorney-at-law for litigation in order to collect such debt. A debt buyer is considered to be a debt collector for all purposes.

“Debt collector” means any person who regularly collects or attempts to collect, directly or indirectly, consumer debts owed or due or asserted to be owed or due another.  The term does not include any officer or employee of a creditor who, in the name of the creditor, collects debts for such creditor, but it does include any creditor who, in the process of collecting its own debts, uses any name other than its own which would indicate that a third person is collecting or attempting to collect such debts. The term does include a debt buyer.

“Earnings” means compensation paid or payable for personal services, whether denominated as wages, salary, commission, bonus, payment for skilled, personal or professional services, or otherwise, whether earned as an employee or as an independent contractor, and also includes alimony.

“Execution” includes an attachment, levy, garnishment, or other disablement, freeze, or seizure of property, whether pre-judgment or post-judgment, to satisfy a debt.  Except for purposes of § 2-112, it also includes a creditor’s exercise of a right of setoff to collect a debt.  It does not include self-help repossession of collateral.

“Exempt” means, unless otherwise specified, not subject to execution, levy, attachment, garnishment, setoff, self-help, seizure, or any other form of process, court order, creditor or other action for the purpose of debt collection or restitution or other equitable claim.  Funds that are exempt remain exempt when they are paid or transferred to the debtor, the debtor's spouse, partner, beneficiary, or dependent or to an account for the benefit of the debtor, the debtor's spouse, partner, beneficiary, or dependent.

“Garnishable earnings” means that part of the earnings of any individual remaining after the deduction from those earnings of any amounts required by law to be withheld such as taxes, social security or alternative pension and Medicare withholdings, and after further deduction of up to fifteen percent of the remainder for contributions for health insurance, a medical expense account, a pension, or a retirement account.

“Garnishment” means any legal or equitable procedure through which the earnings, property, or funds of any person are required by a court of competent jurisdiction to be withheld by another entity for payment of any debt to a creditor.

“Trustee” means a trustee served pursuant to chapter 246

“Value” means current fair market value of accounts, goods or property less the amount of any liens or security interests in the accounts, goods or property, based on the price that would be paid, assuming a willing buyer and a willing seller, for accounts, goods or property of similar age and condition.  A debtor’s testimony as to the value of property the debtor owns or as to the advertised value of property similar to that claimed as exempt shall be admissible as evidence of an item’s value.

Section 3.  Earnings Exempt

(a) If earnings of a defendant are attached to satisfy a judgment for collection of a consumer debt, such debtor’s garnishable earnings for any week that are less than eighty times the greater of the federal minimum hourly wage prescribed by section 206(a)(1) of Title 29 of the United States Code or the state minimum hourly wage provided by the Massachusetts hourly minimum wage prescribed by section 1 of chapter 151 in effect at the time are exempt from such attachment and not subject to garnishment.  This exemption shall be adjusted pro rata for any pay period other than weekly.

(b) If the debtor’s garnishable earnings exceed the amount provided by the preceding subsection, no more than 10% of the amount exempt from attachment under the preceding subsection shall be subject to garnishment unless the weekly garnishable earnings of the debtor exceed $1200, in which case no more than 15% is subject to garnishment. The amount not subject to garnishment is exempt from attachment.

(c) If more than one order of attachment for a consumer debt is served on a trustee with respect to the same debtor, the order of attachment served earliest shall take priority.  If an order of attachment with greater priority consumes the entirety of the disposable income that is available for garnishment under the preceding subsections, then no part of the debtor’s garnishable earnings shall be garnished pursuant to the order of attachment with lower priority.

(d) The protections for earnings set forth in this section apply to all debtors whose physical place of employment is in Massachusetts, notwithstanding that the debtor’s employer may have corporate offices or other places of business located outside this state.

(e) The provisions of this section shall not apply in any proceeding to attach wages or a pension to satisfy a divorce, separate maintenance or child support order of a court of competent jurisdiction, and in such actions, including an action for trustee process to enforce a support order under section 36A of chapter 208, the provisions of federal law limiting the amounts which may be trusteed, assigned or attached in order to satisfy an alimony, maintenance or child support order shall apply in lieu of said provisions of this section.

(f) Except as otherwise permitted by law, amounts held by a trustee for a defendant in a pension, as that term is defined in section 28 of chapter 246  shall be reserved in the hands of the trustee and shall be exempt from attachment to satisfy a judgment for collection of a consumer debt.

(g) Section 28 of chapter 246 shall be amended by adding the following paragraph at the end thereof: “The provisions of this section shall not apply in any proceeding to attach earnings or a pension to satisfy a judgment for collection of a consumer debt, as those terms are defined in the [codification of the Family Financial Protection Act] and in such actions the provisions of the [codification of the Family Financial Protection Act] shall apply lieu of said provisions of this section.”

(h) The employer may not discipline, suspend or discharge an employee, or refuse to hire any individual because of an income withholding order for a consumer debt or because of any obligation such income withholding imposes against the employer.  Any employer who violates this section shall be liable in a civil action, action for contempt or other appropriate proceeding to such employee or individual for all wages and employment benefits lost by the employee or individual from the time of the unlawful discipline, suspension, refusal to hire or discharge to the period of reinstatement, and an additional penalty of up to $1,000.

Section 4.  Limitations on Actions for Consumer Debts

(a) Any action for the collection of a consumer debt shall be commenced within three years of the accrual of the cause, which shall be the earlier of the date of charge-off, placement for collection, or 180 days after the last regular payment.  This period shall apply whether the claim sounds in contract, contract under seal, account stated, open account or other cause, and notwithstanding the provisions of any other statute of limitations unless that statute provides for a shorter limitations period.  This paragraph shall apply to all claims brought after the date of enactment of this Act.

(b) Any waiver by any consumer of any protection provided by or any right of the consumer under this section is void, and may not be enforced by any Federal or State court or any other person.

(c) If a consumer debt has been charged-off or placed for collection, or there has not been any payment on the debt for over 180 days, any subsequent payment toward the debt or oral or written affirmation of the debt shall not extend the three-year limitations period, nor shall it bar the consumer from asserting any defenses to the collection of a consumer debt.  If a payment on a defaulted or charged-off debt completely cures the default and pays off any delinquency, then a new cause of action may accrue upon a subsequent default or charge-off.

(d) When the period within which an action may be commenced under this section has expired, the right to collect the consumer debt is extinguished as well as the remedy.  No person shall attempt to collect a consumer debt after the three-year period described in paragraph (a) has expired.

(e) If a consumer debt was created by or based upon a consumer form contract, any action for collection of that consumer debt shall be based on only a claim for breach of contract and not on an open account, account stated, quantum meruit or other cause of action. Regardless of the cause of action asserted, a consumer may raise a defense based upon the reasonable value of goods or services provided.

(f) Notwithstanding the provisions of section 20 of chapter 260 or of any other law, an action upon a judgment or decree on a consumer debt, including any execution upon or trustee process based on such judgment or decree, and all other activity to collect on the judgment must be commenced within five years after the entry of the judgment or decree.

Section 5.  No Imprisonment for Debt

Notwithstanding the provisions of section 18 of chapter 224 or of any other law, no person or corporation shall seek a capias or other warrant for the arrest of a debtor for any action or failure to act that arises or relates to a lawsuit to collect a consumer debt or a judgment arising therefrom, unless such warrant relates to a violation of the Criminal Code.

Section 6.  Interest; Attorney’s Fees

(a) If the plaintiff is the prevailing party in any action to collect a consumer debt, whether the claim sounds in contract, contract under seal, account stated, open account or other cause, any interest computed pursuant to section 6C of chapter 231 or section 8 of chapter 235 shall be limited to the rate of interest equal to the weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the calendar week preceding the date of the judgment. No other rate of interest on the judgment shall be permitted, including the rate provided for in the contract.

(b) If the plaintiff is the prevailing party in any action to collect a consumer debt, the plaintiff shall be entitled to collect attorney’s fees only if the contract or other document evidencing the indebtedness sets forth an obligation of the consumer to pay such attorney’s fees, and subject to the following provisions:

(1) If the contract or other document evidencing indebtedness provides for attorney’s fees in some specific percentage, such provision and obligation shall be valid and enforceable up to but not in excess of fifteen percent (15%) of the amount of the debt excluding attorney’s fees and collection costs.

(2) If a contract or other document evidencing indebtedness provides for the payment of reasonable attorney’s fees by the debtor, without specifying any specific percentage, such provision shall be construed to mean the lesser of fifteen percent (15%) of the amount of the debt, excluding attorney’s fees and collection costs, or the amount of attorney’s fees calculated by a reasonable rate for such cases multiplied by the amount of time reasonably expended to obtain the judgment.

(3) The documentation setting forth a party's obligation to pay attorney’s fees shall be provided to the court before a court may enforce those provisions. Such documentation must include any materials that applicable court rules required the plaintiff to file together with the complaint.

(c) If the debtor is the prevailing party in any action to collect a consumer debt, the debtor shall be entitled to an award of reasonable attorney’s fees.  The amount of the debt that the creditor sought shall not be a factor in determining the reasonableness of the award.  In the alternative, at the debtor’s election, a prevailing debtor shall be awarded the amount of attorney’s fees that the plaintiff would have been entitled to collect if the plaintiff had been the prevailing party.