Attorney General Ellison hails House passage of key provisions of Debt Fairness Act

Key provisions of the Act included in Commerce Policy Omnibus bill include banning the automatic transfer of medical debt to a patient’s spouse, protecting Minnesotans’ last $4k from collections, banning reporting medical debt to credit agencies, and more

Other provisions of the Act included in Health Policy Omnibus bill

April 15, 2024 (SAINT PAUL) — Minnesota Attorney General Keith Ellison celebrated the passage in the Minnesota House of Representatives of HF 4077, the Commerce Policy Omnibus bill, which contains key provisions of the Minnesota Debt Fairness Act.

“Minnesotans working to pay back their debts should not be dragged into poverty, forced into divorce, or denied medical care, but that’s exactly what’s happening across our state,” said Attorney General Ellison. “The Minnesota Debt Fairness Act fixes much of what’s broken in our debt collection system and makes that system more fair and just for everyone involved. I’m extremely grateful to Representative Liz Reyer and Senator Liz Boldon for their tremendous leadership on this important issue and to every lawmaker today who voted to pass key provisions of the Debt Fairness Act.”

Included in the House Commerce Policy Omnibus bill are the following provisions of the Minnesota Debt Fairness Act:

• Banning the automatic transfer of medical debt to a patient’s spouse
  Nobody battling a serious medical issue should be forced into divorce to protect their partner from medical debt. No other debt is automatically transferred to one’s spouse, and medical debt should not be transferred this way either.
• Banning medical debt from being reported to credit bureaus
  Unlike other types of debt, medical debt is often not a choice and should not be treated like one. By banning medical debt from being reported to credit bureaus, we will stop medical debt from ruining people’s credit and making loans harder and more costly to obtain.
• Protecting the last $4,000 of someone’s bank account from collections
  Under current law, debt collectors can drain every cent from a consumer’s bank account, leaving nothing for housing, food, medicine, and more. This can cause a financial crisis that forces Minnesotans into poverty or traps them in cycles of debt. States like Ohio, Indiana, Wisconsin, North Dakota, and South Dakota all protect some money in people’s bank accounts. Minnesota should too.
• Capping garnishment levels based on income
  Under current law, up to 25% of someone’s paycheck can be seized by debt collectors. People with incomes at or around minimum wage cannot afford to have their wages garnished at these levels. This bill automatically adjusts that cap based on income, starting at 5% for low-income Minnesotans and ending at 25% for high-income Minnesotans.

The provision of the Debt Fairness Act that bans providers from denying necessary medical care to Minnesotans with outstanding medical debt will be included in the Health Policy Omnibus bill in the state House.