Filing bankruptcy is generally a decision of last resort that is not made lightly. Some debtors genuinely want to pay their bills, but changes in economical circumstances make it impossible. Others are under such financial stress that a fresh start is the only answer. In South Carolina, a debtor can file straight bankruptcy or ask for payment restructuring.
South Carolina Bankruptcy Topics
- Personal Bankruptcy Options
- Keep Your Home: Bankruptcy and Foreclosure
- South Carolina Exemptions to Bankruptcy Liquidation
- Options for Filing Bankruptcy
- Local Bankruptcy Courts and Trustees
Options for Personal Bankruptcy in South Carolina
All states are governed by the U.S. Bankruptcy Code, Title 11. Thus, citizens of South Carolina may file under Chapter 13 or Chapter 7 bankruptcy.
Chapter 7 Bankruptcy
Debtors filing Chapter 7 bankruptcy often have no assets worth selling, to help repay creditors in part. But, if applicable items are available, the court trustee takes charge of selling the property and dispersing the proceeds among the creditors. While some debts are court mandated and cannot be forgiven through bankruptcy, debts like credit cards are forgiven. The debtor can escape the financial pressure, and hopefully make good financial choices in the future. However, the debtor will have to pass a means test to determine eligibility for Chapter 7 bankruptcy first. The median income for residents of South Carolina is: Single: $38,728; two-person household: $50,823; three-person family: $54,834.
Chapter 13 Bankruptcy
For the debtors that want to pay their bills and retain the assets, Chapter 13 bankruptcy is the answer. The court will negotiate with creditors to determine the minimal amount necessary to repay debts. Then, the resulting amounts are added and a repayment plan is established. The debtor has 3-5 years to satisfy the creditors. As long as the payments are regularly submitted to the trustee, and all current bills are up to date, all assets are retained. However, the debtor will not qualify for Chapter 13, if the total amount of unsecured debt is more than $336,900 or the secured debt is greater than $1,010,650. (See more on Filing Chapter 13 in South Carolina).
Filing Bankruptcy during Foreclosure
Filing bankruptcy to stop foreclosure proceedings does not necessarily work. While the process is stalled, the lien holder can petition the court to lift the stay on property, and sell the property for repayment of the debt. If the property is retainable, the best solution is consulting a bankruptcy lawyer, before foreclosure is initiated, to determine the debtor’s options.
South Carolina Bankruptcy Exemptions
In every state, debtors are allowed to claim certain assets as exempt from bankruptcy proceedings. The chart below lists a few of the potential exemptions for the state of South Carolina:
Type of Asset(s)
Details on Applicable Exemption(s)
Real property or co-op worth up to $5000. Couples may double the amount.
Accident, disability or illness benefits, insurance benefits for beneficiary-unless parties agree to use for debt resolution, fraternal and society benefits, life insurance proceeds up to $4000-or more, if needed for support, life insurance
Alimony, child support, and business assets for a partnership
ERISA, general assembly, firefighters, judges, solicitors, public employees and police officers
Animals, crops, appliances up to $2500; $1000 of assets and $5000 each for two burial plot-if no homestead; $500 worth of jewellery; health aids; injury and wrongful death compensation; older car worth no more than $1200
Victims and veteran’s compensation; unemployment and workmen’s comp; Social Security and public assistance
South Carolina Bankruptcy Court Filing Options
Use a Bankruptcy Lawyer
Filing bankruptcy without the services of a lawyer is strongly discouraged. During the stressful court proceedings, legal counsel is great moral support. More importantly, the lawyer understands all of the nuances of bankruptcy law, the potential assets a debtor can exempt from asset liquidation, answer legal questions in court, and provide sage legal advice.
Use a Filing Service
A filing service will only file paperwork with the court. However, the services do not necessarily comply with state bankruptcy law. So, if an important document is missing, the debtor has no recourse. The service will not represent the individual in court, answer any questions, or provide any legal advice.
File “Pro Se”
The court allows debtors to file pro se, if he/she cannot afford the services of a lawyer. However, it is strongly recommended to borrow the money, before opting to face the court alone. Unless the debtor has an extensive knowledge of South Carolina bankruptcy law, the potential financial and legal ramifications are detrimental to the debtor.
Courts and South Carolina Bankruptcy Trustee Information
South Carolina District Court Main Office
Matthew J. Perry Jr.
United States Courthouse
901 Richland Street
Columbia, SC 29201