By the Division of Banks


Did you know…

On April 7, 2011 expanded consumer protections will go into effect which significantly increase the money and personal property which is out of the reach of a creditor seeking to satisfy a court judgment.

What this means for you…

A creditor is unable to seize certain funds and property covered by the law to satisfy an outstanding debt. In addition, the revised law puts other protections into place for consumers who are over sixty years of age or consumers who are handicapped. These protections ensure that financially distressed Massachusetts residents are able to maintain the basic necessities of life.

Examples of personal items exempted:

  • An automobile up to $7,500 of wholesale resale value, this exemption rises to $15,000 for a handicapped person or a person age 60+
  • Cash, savings or other deposits in a bank account of up to $2,500
  • Household furniture up to $15,000 in value
  • Wages equal to 85% if the debtor's gross wages or 50 times the hourly minimum wage per week, whichever is greater
  • One computer and one television

Protect Yourself:

  • Attend any scheduled court proceeding including Small Claims Court so you do not lose by default.
  • Assert your rights in court to ensure that the Court does not order you to make payment from exempt assets.

The Supreme Judicial Court approved amendments to the Trial Court's Uniform Rules on Small Claims which went into effect on October 1, 2009. These rules were amended to address various issues affecting consumers in debt collection cases initiated in Small Claims Court. Key provisions include:

  • Requiring that creditors verify a debtor's current address prior to filing a claim to ensure that debtors are properly notified of the pending case.
  • Requiring creditors to set forth details of the amounts owed, including last four digits of account number, amount and date of last payment, if any, and the name of the original creditor, if different.
  • Requiring that creditors notify the Court in writing when a small claims judgment has been paid in full.

These amendments were put in place to prevent default judgments from being entered against consumers who were not properly notified of the court proceedings. Prior to these amendments many consumers had default judgments entered against them as the address used by the creditor for notification purposes was out of date or incorrect. Consumers only became aware of the court proceedings when the Constable's Office came to their residence to execute the judgment by seizing their property which most often included their vehicles. If you believe that your property was seized due to a default judgment against you due to insufficient notification you should contact the Court Clerk's Office in which the judgment was issued for guidance.

Know your rights…

If you are being contacted by an individual or company who is attempting to collect a debt first verify if they are the creditor or a debt collector. Creditors are persons or entities attempting to collect a debt owed to them. The collection practices of such creditors are regulated by the Office of the Attorney General. A debt collector is a third party which attempts to collect a debt owed or due to another. Please note, debt collectors who are operating in the Commonwealth are required to be licensed by the Division of Banks (Division). In addition to debt collectors, the Division also has oversight regarding disputes involving state-chartered banks, credit unions, mortgage lenders, and other licensed entities. However, attorneys acting on behalf of a client are not required to be licensed as a debt collector by the Division if they are licensed in the Commonwealth to practice law.

YOU SHOULD:

  • Request verification of a disputed debt in writing.
  • Create a paper trail by keeping a record of the date, time and name of the individual contacting you and putting all of your requests and responses in writing. Pla n to repay any undisputed obligation and determine a payment plan you can maintain and provide that to the creditor or debt collector in writing.
  • Check the licensing status or Bar status of a debt collector/attorney which contacts you.

A CREDITOR OR DEBT COLLECTOR MUST:

  • Tell you the amount of the debt and the name of the creditor to whom it is owed at the initial communication or within five days of the contact.
  • Disclose in the initial communication that they are attempting to collect a debt and that any information obtained will be used for that purpose.
  • Disclose the name of the creditor or debt collection company and the name of the individual collector making the contact.
  • Inform you of the name and address of the original creditor if you request that information in writing within thirty days of the initial contact.
  • Communicate directly with your attorney if you provide such information to the creditor or debt collector.
  • Notify you in writing within thirty days of the initial contact of your right to not have collection telephone calls made to your place of work.

A CREDITOR OR DEBT COLLECTOR CAN:

  • Assume a debt is valid if it is not disputed within thirty days of contacting the consumer.
  • Contact any person, including family and friends, for the sole purpose or acquiring information on where you live or how to contact you.
  • Call you at home and come to your residence during normal working hours which are from 8:00 A.M. to 9:00 P.M., but only twice in any seven day period.
  • Collect expenses in excess of the amount owed, such as fees or interest, if such charges are expressly authorized by the agreement or permitted by law.

A CREDITOR OR DEBT COLLECTOR CAN NOT:

  • Discuss your debt with third parties, such as friends or neighbors without your direct prior consent or judicial authority.
  • Represent or imply they are affiliated with the federal government or any state or distribute any document which simulates or falsely represents that it is authorized by any court or government agency.
  • Use or threat to use violence or criminal means to cause physical harm, or harm to your reputation or property.

Additional Resources:

  • For a complete list of amendments, including a list of exempt property, please refer to Chapter 431 of the Acts of 2010.
  • For questions or assistance with a debt collector, bank, credit union, mortgage lender, or other licensed entities please visit the Division of Bank's website at www.mass.gov/dob. You may also contact the Division's Consumer Assistance Unit at (617) 956-1501 Monday-Friday 8:45am to 5:00pm.
  • For questions or assistance with a creditor collecting its own debt please visit the Attorney General's website at www.mass.gov/ago. You may also contact the Attorney General's Office at (617) 727-8400.
  • For questions or assistance regarding attorney conduct please contact the Board of Bar Overseers at (617) 728-8700.
  • For additional information regarding debt collection you may visit the Federal Trade Commission's website, www.ftc.gov . You may also contact the FTC at (877) 382-4357