Massachusetts Debt Collection Laws – What They Say

Hannah Locklear | December 13, 2023

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Summary: Under Massachusetts debt collection laws, you have protections from unfair debt collection practices. Some of these laws include the following: debt collectors must be licensed to collect in MA; unfair, deceptive or unreasonable debt collection practices are prohibited; certain property is exempt from collections; the MA statute of limitations on debt sets a time limit to file a debt lawsuit against debtors. SoloSuit can help you beat Massachusetts debt collectors in and out of court.

Massachusetts debt collection regulations can protect you from unfair and aggressive debt collections tactics. If you're a Massachusetts resident in debt, or experiencing a debt collection lawsuit, you should study and understand relevant debt collection laws so you can properly defend yourself.

Massachusetts debt collection laws deem 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 Massachusetts debt collection laws and how to respond to a debt lawsuit there.

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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Massachusetts debt collection laws

Massachusetts has several laws that ensure fairness during the debt collection process. These laws are designed to protect consumers, like you.

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.

Below, we will list and explain the most important Massachusetts debt collection laws that all consumers should know about.

Debt collectors must have a license to collect in Massachusetts

MGL c. 93, § 24(a) states:

“No person shall directly or indirectly engage in the commonwealth in the business of a debt collector, or engage in the commonwealth in soliciting the right to collect or receive payment for another of an account, bill or other indebtedness, or advertise for or solicit in print the right to collect or receive payment for another of an account, bill or other indebtedness, without first obtaining from the commissioner a license to carry on the business, nor unless the person or the person for whom he or it may be acting as agent has on file with the state treasurer a good and sufficient bond.”

This means that, in order to collect a debt from you, debt collectors must obtain a licenses from the commissioner of the Division of Banks (DOB). Debt collection agencies must pay thousands to ensure that each of their employees are properly registered to collect in Massachusetts.

In addition to debt collectors, MGL c. 93, § 24(b)(c) further explains:

“A person shall not directly or indirectly engage in the commonwealth in the business of a third party loan servicer without registering with the commissioner. A registrant shall not be required to comply with sections 24F to 27, inclusive.

“This section shall not apply to a bank as defined in section 1 of chapter 167…”

Therefore, this law also applies to third party loan servicers. However, banks or creditors do not have to register with the DOB for a collections license.

This law prevents unruly, untrained, and unlicensed debt collectors from using abusive debt collection practices to gain a profit. In effect, it protects you from unfair debt collection practices that would be easy to use without gaining a proper license and registration to engage in collection efforts.

Unfair, deceptive or unreasonable debt collection practices are prohibited

Even when a debt collector is licensed to practice debt collection in Massachusetts, there is still a chance they will use unethical methods during their collection attempts. Luckily, Massachusetts laws protect you from unfair treatment by debt collectors.

MGL c. 93, § 49 deems the following actions to be considered unfair, deceptive or unreasonable:

“(a) The creditor communicates, threatens to communicate, or implies the fact of such debt or alleged debt to a person other than the person who might reasonably be expected to be liable therefor, or to an authorized user after the fact if that status is communicated to the creditor in writing, except with the written permission of the alleged debtor. The provisions of this paragraph shall not prohibit a creditor from notifying a debtor of the fact that the creditor may report a debt or alleged debt to a credit bureau or engage an agent or an attorney for the purpose of collecting the debt or alleged debt. For the purposes of this paragraph, the use of language on envelopes indicating that the communication relates to the collection of a debt shall be deemed a communication of such debt or alleged debt.

(b) The creditor communicates directly with the alleged debtor after notification from an attorney representing such debtor that all further communications relative to the debt should be addressed to him.

(c) The creditor communicates with the alleged debtor in such a manner as to harass or embarrass the alleged debtor, including, but not limited to communication at an unreasonable hour, with unreasonable frequency, by threats of violence, by use of offensive language, or by threats of any action which the creditor in the usual course of business does not in fact take.

(d) The creditor communicates with alleged debtors through the use of forms or instruments that simulate the form and appearance of judicial process.”

In other words, here are some Massachusetts debt collection laws that collectors and creditors must follow:

  • Debt collectors and creditors cannot discuss, or threaten to discuss, your debt with anyone other than the person who owes it.
  • Debt collectors and creditors must communicate with the debtor’s attorney after notification that an attorney has been appointed.
  • Debt collectors and creditors cannot harass or embarrass the debtor in any way; this includes threats of violence, offensive languages, or threats of legal action that they cannot take.
  • Debt collectors and creditors cannot communicate with debtors at unreasonable hours (before 8 a.m. or after 9 p.m.).
  • Debt collectors and creditors cannot contact debtors more than twice for debt within seven days, or more than twice for every debt within 30 days at your workplace or other places.
  • Debt collectors and creditors cannot pretend to be legal officers or government officials, and they cannot use documentation that imitates legal proceedings.

If a debt collector or creditor has used any of these debt collection tactics to get you to pay off a debt, you can report them to the Consumer Financial Protection Bureau, the Federal Trade Commission, or the Massachusetts attorney general's office.

Certain property is exempt from collections

According to MGL c.235, § 34, the following property is exempt from collections, meaning debt collectors and creditors cannot seize this type of property in order to collect on a debt you owe:

  • Clothing and bedding
  • Home utilities such as heating units, stoves, refrigerators, freezers, hot water heaters, etc.
  • Money of up to $500 that is designated for the payment of home utilities like gas, water, electricity, etc.
  • Household furniture not exceeding $15,000 in value
  • Books not exceeding $500 in value
  • Certain types of livestock
  • Tools needed for the debtor’s work, not exceeding $5,000 in value
  • Provisions designated for the debtor’s family, not exceeding $600 in value
  • One pew occupied by the debtor or the debtor's family in a house of public worship
  • Boats and fishing equipment of a debtor who’s occupation is fisherman, not exceeding $1,500
  • The uniform of an officer or soldier
  • The rights of burial or tombs for the dead
  • Sewing machines used by the debtor or debtor’s family, not exceeding $300 in resale value
  • One computer and one television used by the debtor or debtor’s family
  • Shares not exceeding $100 in value
  • Estates of homestead
  • $2,500 in cash or savings or other deposits in a banking or investment institution
  • A car that is necessary for the debtor’s transportation to secure or maintain employment, not exceeding $7,500 of wholesale resale value
  • The debtor's aggregate interest in any personal property, not to exceed $1,000 in value, plus up to $5,000 of any unused dollar amount of the aggregate exemptions
  • The debtor's aggregate interest, not to exceed $1,225 in value, in jewelry held primarily for the personal, family or household use

Massachusetts wage garnishment laws

If a creditor or debt collector receives a court order, usually in the form of a judgment, they may have rights to garnish your wages. However, MA debt laws set rules and regulations on wage garnishment. In Massachusetts, creditors and debt collectors can only garnish your wages in the lesser amount of the following:

  • 15% of the debtor’s gross wages before taxes or other mandatory deductions
  • The debtor’s disposable income less 50 times the greater of the federal or the Massachusetts hourly minimum wage per week

Below is the exact wording of the law, as outlined in MGL c.246, § 28:

“If wages for personal labor or personal services of a defendant are attached for a debt or claim, an amount not exceeding the greater of 85 per cent of the debtor's gross wages or 50 times the greater of the federal or the Massachusetts hourly minimum wage for each week or portion thereof out of the wages then due to the defendant for labor performed or services rendered during each week for which such wages were earned but not paid shall be reserved in the hands of the trustee and shall be exempt from such attachment.”

Additional Massachusetts debt collection regulations

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

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Massachusetts statute of limitations on debt

A statute of limitations is a law that sets a time limit for debt collectors and creditors to sue someone for debt. This time limit usually runs 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 means that the statute of limitations on creditor card debt, oral, and written contracts is six years.

So, if you live in Massachusetts and haven’t made any payments on a debt account in six years or more, you cannot be sued for it.

However, if a debt collector has already obtained a judgment against a debtor, the statute of limitations extends to 20 years. This means that the judgment is valid for up to 20 years, and the collector can garnish wages or seize property during that time period. In addition, the unpaid debt accumulates interest based on the statutory rate of 12 percent during this period.

Below, we’ve listed the MA statute of limitations on debt laws exactly as they appear in Massachusetts General Laws Ch. 260 §1 and §2:

“The following actions shall be commenced only within twenty years next after the cause of action accrues: First, Actions upon contracts under seal. Second, Actions upon bills, notes or other evidences of indebtedness issued by a bank. Third, Actions upon promissory notes signed in the presence of an attesting witness, if brought by the original payee or by his executor or administrator. Fourth, Actions upon contracts not limited by the following section or by any other law. Fifth, Actions under section thirty-two of chapter one hundred and twenty-three to recover for the support of inmates in state institutions.

“Actions of contract, other than those to recover for personal injuries, founded upon contracts or liabilities, express or implied, except actions limited by section one or actions upon judgments or decrees of courts of record of the United States or of this or of any other state of the United States, shall, except as otherwise provided, be commenced only within six years next after the cause of action accrues.”

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.

Ignoring debt collectors has consequences

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 receiving 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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Respond to a debt lawsuit in Massachusetts

If you’ve been sued for a debt in Massachusetts, you must respond to the lawsuit before the 20-day deadline. If you don’t, you risk losing by default judgment, which can lead to bigger problems like wage garnishment and liens places on your property.

You should respond to a debt collection lawsuit with a written response, known as an Answer.

Follow these three steps when drafting an Answer to your Massachusetts debt lawsuit:

  1. Respond to each claim listed against you.
  2. Assert your affirmative defenses.
  3. File the Answer with the court, and send a copy to the opposing attorney.

You can complete all these steps on your own, without having to hire a lawyer. SoloSuit’s Answer form includes a section for you to respond to the claims and list your affirmative defenses. After you’ve created your customized Answer, SoloSuit also takes care of filing it into the case and sending it to the plaintiff.

Draft and file your Answer online in minutes.

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You can use SoloSuit to respond to a debt lawsuit, to send letters to collectors, and even to settle a debt. SoloSuit's Answer service is a step-by-step web-app that asks you all the necessary questions to complete your Answer. Upon completion, we'll have an attorney review your document and we'll file it for you.

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No matter where you find yourself in the debt collection process, Solo is here to help you resolve your debt.

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