Massachusetts Debt Relief Programs: Counseling, Collector Rules, and Legal Protections

Massachusetts debt relief programs at a glance

The word "program" can mislead. In Massachusetts, as in other states, there is no public fund that settles credit card or medical balances for you. The real relief comes from three sources: nonprofit agencies that help you repay on better terms, state rules that control how creditors collect, and courts that apply generous exemptions when a creditor tries to take money or property.

If the debt started with a lost job or a rent gap, help with basic costs can keep new debt from piling up. Our Massachusetts assistance programs guide lists the main options, and renters can read about Massachusetts rent relief.

Nonprofit counseling and repayment plans

A credit counseling session is a calm look at your whole money picture: income, expenses, and each debt, with the interest rate and the minimum payment. The National Foundation for Credit Counseling is the largest nonprofit network, and its certified counselors usually work by phone or video, so where you live in the state does not matter.

If you can afford to repay once interest drops, the counselor may offer a debt management plan. You pay the agency once a month, and it pays your card companies, which often reduce rates and drop late fees. Plans usually take three to five years, and enrolled cards are closed. Because you repay in full, the hit to your credit is smaller than with settlement or bankruptcy.

Ask any agency for its fees in writing, how quickly it pays creditors, and whether it is a nonprofit. The CFPB has a short guide on choosing a credit counselor, and our debt relief programs guide compares plans, settlement, and consolidation nationally.

The Attorney General's collection rules

Massachusetts is unusual because its debt collection rules reach original creditors, not just collection agencies. The Attorney General's regulations at 940 CMR 7.00 treat certain collection tactics as unfair or deceptive. The contact limits in 940 CMR 7.04 are the ones people use most:

• Calls and texts: no more than two communications in each seven-day period to your home, cell phone, or other personal number, for each debt. Other numbers are limited to two per 30 days. Contacts you ask for do not count.
• Time of day: not outside your normal waking hours. If the creditor does not know them, calls are limited to 8 a.m. to 9 p.m. Eastern time.
• Your job: once you ask, the creditor must stop calling you at work. A spoken request lasts ten days unless you confirm it in writing within seven days, so put it in writing. Creditors must send you a written notice of this right.
• Visits: generally no more than one visit to your home every 30 days per debt, and no visits to your workplace unless you ask.
• Costs and conduct: no collect calls or text fees charged to you, no profanity, and the caller must identify the business.
• Lawyers: once your attorney asks that contact go through them, the creditor generally must stop contacting you directly.

Division of Banks licensing

The Massachusetts Division of Banks enforces the state's debt collector licensing law, General Laws Chapter 93, sections 24 through 28, along with its own regulations at 209 CMR 18.00. Third-party collectors must hold a Massachusetts license, and collecting without one can lead to civil and criminal penalties. The Division's Consumer Assistance unit takes complaints, and its published enforcement orders show it has ordered unlicensed collectors to stop.

Two practical tips. First, ask any collector for its Massachusetts license number and check it on NMLS Consumer Access, the national licensing database. Second, note that the Division and the state's highest court have treated some passive debt buyers, which only own accounts and hire others to collect, as outside the licensing law. The company actually contacting you still needs a license.

Six years to sue, and a bill to shorten it

For most contract debts, including credit cards and personal loans, General Laws Chapter 260, section 2 gives creditors six years from when the claim accrues to file suit. After that, the debt is "time-barred," but you usually must raise the deadline as a defense in court. A payment on an old account may restart the clock, so get advice before paying anything on a debt that is close to or past six years old. The CFPB explains how time-barred debts work.

Massachusetts lawmakers have been debating a Debt Collection Fairness Act for several sessions. The Senate passed a version in July 2025 that would shorten the lawsuit deadline on consumer debt to five years and cut the interest rate on consumer debt judgments, which the National Consumer Law Center describes as 12 percent today, the highest in the nation. We found no record that the House passed it before the 2025 to 2026 session ended its formal business, so the six-year rule still applies. We will update this page if the law changes.

Protected wages and bank balances

Creditors need a court judgment, followed by a separate court process, before they can take wages. Under General Laws Chapter 246, section 28, the exempt amount each week is the greater of 85 percent of your gross wages or 50 times the higher of the federal or Massachusetts hourly minimum wage. Massachusetts uses gross pay, before taxes, which is more protective than the federal rule based on take-home pay.

At the Massachusetts minimum wage of $15 an hour, the weekly floor is $750:

Support orders and some government debts follow different limits.

The $2,500 bank account exemption

Under General Laws Chapter 246, section 28A, $2,500 in a person's account at a bank or credit union is exempt from attachment by trustee process. The bank should only hold money above that amount. Each person gets one $2,500 exemption at a time, and businesses do not qualify. Federal benefits such as Social Security have their own protection when they are deposited directly; see the CFPB's guide on protected federal benefits.

Hospital bills and medical debt

Massachusetts residents with low incomes often have options before a hospital bill becomes a collection problem:

• Health Safety Net. This state program pays acute care hospitals and community health centers for some services for low-income residents. Under the current rules in 101 CMR 613.00, patients up to 150 percent of the poverty level may qualify without a deductible, and those up to 300 percent may qualify for partial coverage, with collection limited mostly to the deductible. The rule was changed again by an emergency amendment filed in October 2026, so ask the hospital's financial counselor how it applies to you.
• Hospital financial assistance. Nonprofit hospitals must publish a financial assistance policy. Ask for it, and for an itemized bill, before you pay.
• Collector rules still apply. The 940 CMR 7.00 limits on calls and visits cover medical creditors and their collectors too.

On credit reports, the three national credit bureaus already leave off paid medical collections and medical debts under $500. In June 2026, the Healey administration proposed Department of Public Health rules (105 CMR 95.00) that would bar licensed health care providers and their collectors from reporting medical debt to credit bureaus. Public hearings were held in July 2026. We could not confirm a final vote or an effective date, so treat this as a proposal for now.

Responding to a collection case

Many Massachusetts debt cases are filed as small claims in District Court, the Boston Municipal Court, or Housing Court, while larger claims go to District or Superior Court. The papers you receive will give a court date or a deadline to answer.

1. Go to every court date. Missing one usually leads to a default judgment.
2. Check the last payment date against the six-year limit, and ask the creditor to prove it owns the debt.
3. If you lose, ask about a payment plan you can actually afford. Bring proof of income and expenses.
4. If a creditor seeks your wages or bank account, raise the 85 percent wage rule and the $2,500 bank exemption.
5. Call legal aid or use the court's free Court Service Centers for help with forms.

Your home and the homestead declaration

Massachusetts's homestead law, General Laws Chapter 188, protects equity in the home you live in from most unsecured creditors. There are two levels:

The declared amount doubled from $500,000 to $1,000,000 under the Affordable Homes Act, signed on August 6, 2024. When a home is owned by more than one person, the declared amount is shared among the owners in most cases. The homestead does not protect against your mortgage lender, tax liens, or certain other debts listed in the law. Recording a declaration is simple and inexpensive, and many homeowners in debt do it right away.

Bankruptcy in Massachusetts

Bankruptcy cases are filed in the U.S. Bankruptcy Court for the District of Massachusetts. You must complete a credit counseling course from a provider approved by the U.S. Trustee Program before you file. U.S. Courts explains how Chapter 7 and Chapter 13 work.

Unlike many states, Massachusetts has not opted out of the federal exemption list, so filers can pick either the federal exemptions in 11 U.S.C. 522(d) or the state exemptions, but not a mix. The federal homestead exemption is $31,575 for cases filed on or after April 1, 2025, according to the Federal Register. For most homeowners, the state homestead is far larger, while renters sometimes do better with the federal list. A bankruptcy lawyer or legal aid can run both options against your property.

Legal aid and complaint offices

• Attorney General's Consumer Advocacy and Response Division: takes debt collection questions and complaints. Consumer Hotline 617-727-8400, or file a complaint online at mass.gov.
• Division of Banks: complaints about unlicensed or abusive debt collectors.
• CFPB: complaints about collectors, card issuers, and credit reports through its complaint portal.
• Massachusetts Legal Resource Finder: an online screener that points you to free legal aid programs for your town and problem.
• Greater Boston Legal Services: its consumer rights unit helps qualifying Greater Boston residents with collection harassment, predatory loans, and credit report errors.
• MassLegalHelp.org: plain-language guides from Massachusetts legal services lawyers on debt collection, small claims, and exemptions.

Regional legal aid programs cover the rest of the state, and the Resource Finder is the quickest way to reach the right one.

Avoiding debt relief scams

Strong state rules do not stop every bad actor. Be cautious if a company:

• Asks for fees before it settles or reduces a single debt.
• Tells you to stop all contact with creditors without explaining the lawsuit risk.
• Promises that a "state program" or "government relief" will pay your cards.
• Offers to remove accurate negative items from your credit report.
• Cannot give you a Massachusetts license number when it is collecting a debt.

The CFPB lays out the risks of debt settlement. Remember that applying for official programs, calling the Attorney General's hotline, and using legal aid are free.

Related guides

• Connecticut debt relief programs
• New Hampshire debt relief programs
• Rhode Island debt relief programs
• New York debt relief programs

Frequently asked questions

This guide is general information, not legal or financial advice. Massachusetts laws, regulations, and exemption amounts can change, so check the current law or ask a lawyer before acting. National Relief Program is an independent website and is not affiliated with the Massachusetts Attorney General, the Division of Banks, or any government agency.