Massachusetts Debt Collection Laws – What They Say

Melissa Lyken

May 07, 2021

Know the laws and win against debt collectors in court.

Summary: Massachusetts has many state and federal protections for debtors. Learn what the Massachusetts Debt Collection Laws really say.

If you're a Massachusetts resident in debt or experiencing a debt collection lawsuit, you must acquaint yourself with relevant debt collection laws. The Massachusetts debt collection law deems some common debt collection practices illegal. Failure to comply with the law allows the debtor to use noncompliance as a defense throughout the lawsuit. Keep reading for more information about the Massachusetts debt collection laws.

How Debt Collection Works in Massachusetts

Debt collection is the process of pursuing debt payments owed by businesses or individuals. According to Massachusetts law, the only people who can collect a debt from a debtor are:

Creditor: This is the person or company owed money. If you've borrowed money from credit unions or banks, they become your creditors. Creditors don't need a license to collect a debt owed, but they must follow the Massachusetts Attorney General's Debt Collection Regulations.

Debt Collector: This is a third-party agent who collects money on behalf of a creditor. Since they don't have direct rights to the debt owed, a debt collector needs to apply for a license through the Division of Banks to collect a debt.

Attorney: The attorney collects debt on behalf of creditors instead of the debt collector. They don't have rights to the debt being collected but already have licensure to practice debt collection in the Commonwealth. Attorneys must adhere to the Supreme Judicial Court's Rules of Professional Conduct, the Attorney General's Debt Collection Regulations, and the Fair Debt Collection Practices Act (FDCPA) restrictions when collecting a debt.

Debt Buyer: These are agencies that purchase delinquent debt from creditors attempting to collect a debt. They use attorneys or debt collectors to collect because they don't have direct contact with the consumer. Since debt buyers own the debts, they don't need to obtain licenses to collect them. However, they must follow the FDCPA and debt collection regulations stipulated by the Attorney General's Office.

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Fair Debt Collection Practices in Massachusetts

Massachusetts has debt collection statutes that ensure fairness during the debt collection process. The state's law prohibits debt collectors from communicating with debtors in a manner deemed to harass or cause embarrassment to the debtor. Such actions include calling the debtor during unreasonable hours, using offensive language, or making threats.

The Attorney General of Massachusetts has also outlined debt collection regulations to establish standards that define unfairness and deceptive practices when collecting a debt. We've outlined some techniques that are deemed unfair or misleading here:

  • If the debt collector calls your home more than twice for debt within seven days, or more than twice for every debt within 30 days at your workplace or other places
  • If the debt collector calls without identifying themself
  • If the debt collector contacts you directly despite you obtaining a lawyer
  • If the debt collector calls you at work after you have requested that they don't. Note that you should make a written request as it will be deemed valid until the debtor (you) removes the restriction. An oral request is only valid for ten days
  • If the debt collector calls outside regular waking hours, usually considered to be 8:00 to 9:00 p.m. Debtors with different waking hours should alert the debt collector
  • If the debt collector threatens that non-payment will lead to imprisonment, arrest, or another action that the debt collector can't legally undertake
  • If the debt collector frequently visits your home beyond the stipulated waking hours within 30 days

Unlike federal law, Massachusetts debt collection laws apply to all kinds of debt collectors, including creditors, debt buyers, and third-party collection agencies. Violating any other regulations highlighted constitutes a violation of the Massachusetts General laws of Chapter 93.

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Consequences of Ignoring Debt Collection Tactics

If a debtor doesn't pay a debt despite the collector's debt collection efforts, Massachusetts law allows them to file a collection suit. You're required to file an answer within 20 days after you have been served the summons and complaint. This period includes working days, holidays, and weekends, hence the need to respond promptly.

If the 20th day is on a holiday or weekend, the deadline is extended to the next business day the court is open. Failure to file an answer within the response period results in a default judgment against the debtor. The debt collector can then enforce other collection methods, including the following.

Wage garnishment: This allows a debtor's employer to send a portion of your salary to the creditor. According to federal law, up to 25% of your net earnings can be allocated. However, the debtor can object to wage garnishment by requesting a court hearing and filing a claim of exemption. This means the creditor can only act after the hearing unless the debtor gives up their right to a hearing.

Place a lien on personal property: In this case, the debt collector applies a lien on the debtor's personal property, allowing the creditor to be paid debt due when the debtor sells or refinances their personal property. However, if the debtor doesn't plan to sell the property, the creditor can execute the lien by requesting that a sheriff seize it and arranging for a public sale.

If the debt collector pursues this method, you should ensure that they follow Massachusetts law on judgment lien. Many debt collectors omit some rules, which then renders the lien unenforceable. The debtor should also ensure the creditor provides specific evidence to prove that you own the debt. Creditors often sell bad debts to debt purchasers who have difficulty confirming they own the debts.

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Massachusetts Statute of Limitations for Debt Collection

A statute of limitations is a law that imposes a time limit from when the breach of contract occurs to when the lawsuit is filed to enforce debt payment. According to Massachusetts state laws, the statute of limitations for consumer-related debt is six years.

This period applies to credit card debt and oral and written contracts. However, if the debt collector has obtained a judgment against the debtor, the statute of limitations extends to 20 years. During this period, the unpaid debt accumulates interest based on the statutory rate of 12 percent.

Acquainting yourself with debt collection laws in Massachusetts is critical to understanding your rights. You can use any of the aforementioned illegal debt collecting practices as a defense during a lawsuit.

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