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Mass. law boosts debt collection protections

Governor Deval Patrick Governor Deval Patrick
By Beth Healy
Globe Staff / January 8, 2011

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Governor Deval Patrick yesterday signed into law a bill to provide Massachusetts consumers with greater protection from debt collectors who try to seize their belongings and bank accounts.

The new law updates decades-old property exemptions, allowing consumers to keep a car worth up to $7,500 out of reach of collectors, up from $700 in the past. Owners who are 60 or older or disabled will get a $15,000 car exemption. Consumers also may hold on to $2,500 in a bank account, five times the current level.

“It’s a wonderful victory for consumers,’’ said Barbara Anthony, undersecretary of the state’s Office of Consumer Affairs and Business Regulation. “It’s drawing a bright line here in terms of debt collection practices. As a state, we’re not going to tolerate these shoddy, unscrupulous debt collection practices.’’

The legislation, which was sponsored by Senator Patricia D. Jehlen and passed by the Legislature last week, takes effect April 7. It followed a Globe Spotlight series in 2006 that found debt collectors routinely suing people who have fallen behind on credit card bills, and seizing their cars and other property, often without properly alerting them. Small claims courts have since overhauled their rules, but some consumers have still been subject to towing in the past year.

A group of Massachusetts collection lawyers did not oppose the new exemptions when the bill was being written, saying that towing cars was often counterproductive.

The law, which has been on the books since the Colonial era, has some archaic exemptions, like two cows, 12 sheep, two swine, and four tons of hay. It has now been amended to allow each family to keep a computer and a television.

“This new law will protect thousands of struggling Massachusetts residents, and allow them to house, feed, and support their families and continue to work as they struggle to pay debts and get back on their feet after an economic setback,’’ said Robert J. Hobbs, deputy director of the National Consumer Law Center.

Beth Healy can be reached at bhealy@globe.com.