Debt Fairness Act signed into MN law offering protections, reform

‘Fairer’ debt bill at Minnesota Legislature

Medical debt is less likely to be a big gut punch to families under a new set of rules the Minnesota House is expected to pass on Monday. FOX 9's Corin Hoggard has the story.

ST. PAUL, Minn. (FOX 9) - Minnesotans struggling with medical debt will now have a wider swath of protection after Minnesota Governor Tim Walz signed the Debt Fairness Act into law on Monday.

Reforms within the new law include banning the automatic transfer of medical debt to a spouse, banning reporting medical debt to credit bureaus, and banning denying necessary medical care on the basis of unpaid bills.

A complete summary of the Debt Fairness Act can be found here.

"We all agree that if you borrow money, you should pay it back. We also all agree that we shouldn’t punish people for getting sick," said Minnesota Attorney General Keith Ellison in a statement praising the act. "We also agree that a debt-collection system that makes it harder for people to pay back what they owe does nobody any good. And we also agree that debt collection shouldn’t create more debt."

Collections reforms within the act also establish income-based garnishment from 10% to 25% (as opposed to the flat 25% previously) and extend Minnesota’s wage garnishment protections to everyone living and working in the state.

FOX 9 previously covered the proposal’s path through the Minnesota Legislature, when religious leaders were backing its passage.

Politics Personal Finance Minnesota