Proposed Law Will Make It Harder for Debt Collectors to Seize Debtor's Assets
Norfolk Financial Corporation, a debt collection agency operating in Massachusetts, has garnered media attention recently for its practice of hiring attorneys to collect debts. The Boston Globe and Lynn's The Daily Item have detailed Norfolk's debt collection practices and highlighted the lack of protection state law offers to persons owing even small amounts of debt. The current debt collection law only exempts a small amount of assets from seizure, including $125 in a bank account, $100 in stock, two cows, twelve sheep, and four tons of hay. Vehicles with values of over $700 are not protected, leading to the situations described in the Boston Globe and Daily Item articles.
Senate Bill 2557, filed by State Senator Pat Jehlen and endorsed by the Massachusetts Asset Development Commission, aims to increase the level of assets exempted from collection. This bill will increase assets protected from creditors, starting with protecting cars with a value of up to $7,500 ( the figure is $15,000 if the debtor is disabled or over 60 years old). Bank account balances of up to $2,500 are protected under this legislation, as is household furniture up to $15,000 in value. This bill has been passed by both branches of the Massachusetts House of Representatives and Senate, but is currently awaiting a technical correction in the House of Representatives. Passage of this bill will go a long way towards protecting families like those mentioned in the above articles.