Legal Blog

South Carolina Is A Great Place To Be A Debtor

Different states have different rules when it comes to debt collections. Some states allow creditors to garnish a debtor’s wages to recover on judgments for things like credit card debt. In South Carolina, your wages can only be garnished for taxes and child support.

Also in our state, if you own and occupy a home, at present the first $56,000 of equity (per owner!) Is exempt from judgment creditors. In other words, if you and your spouse own a home that is worth $400,000 and you owe $300,000 to the bank on your mortgage, your home is protected from your creditors, because you and your wife have another $112,000 in exemptions on top of the amount you owe to the bank.

Some states allow creditors to assert a lien against a debtor’s bank account by serving a levy on the bank, without having to give notice to the debtor. Whatever the debtor has in the bank would be frozen and the creditor would be able to have that money paid over to it to apply toward the debt. Such is not the case in South Carolina. Before a creditor can get access to a bank account, a hearing (with advance notice to the debtor) must be held and a court order obtained to have the money paid toward the debt. Obviously, most debtors, once they receive notice that a hearing is coming, will clean out their bank accounts prior to the date of the hearing, so there will be nothing there for the creditor to get.

A judgment in South Carolina is only good for 10 years – after that it goes away. Some states allow creditors to renew judgments.

A judgment is still a good thing to have, but it does not guarantee that the creditor will get paid.

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