Can Bankruptcy Stop Wage Garnishments in South Carolina?

In South Carolina, one of the most pressing concerns for individuals facing debt is the potential for wage garnishments. Wage garnishment occurs when a creditor obtains a court order to deduct money directly from a debtor's paycheck to satisfy a debt. This situation can lead to financial stress and hardship, particularly for those living paycheck to paycheck. Fortunately, filing for bankruptcy can provide relief and halt wage garnishments. But how does this work?

Bankruptcy offers a legal framework for individuals to address their debts, and it can be a powerful tool for stopping wage garnishments. Upon filing for bankruptcy in South Carolina, an automatic stay is enacted. This stay prevents creditors from pursuing collections activities, including wage garnishment, immediately as the bankruptcy process begins.

There are two primary types of bankruptcy that individuals might consider: Chapter 7 and Chapter 13.

Chapter 7 Bankruptcy: This process involves liquidating non-exempt assets to repay creditors. If you successfully file for Chapter 7 bankruptcy, wage garnishments typically stop quickly. Once your bankruptcy petition is filed, the court notifies creditors about the automatic stay, and they must cease all collection actions, including garnishments.

Chapter 13 Bankruptcy: Unlike Chapter 7, Chapter 13 allows individuals to reorganize their debts and create a repayment plan over three to five years. Filing for Chapter 13 also results in an automatic stay that stops wage garnishment. In many cases, you may be able to keep your income and assets while repaying your debts according to the court-approved plan.

It’s essential to note that while bankruptcy can stop existing wage garnishments, it won’t necessarily eliminate the underlying debt that led to garnishment. For instance, if you successfully discharge a debt, the creditor cannot garnish your wages for that specific debt anymore. However, if the debt is non-dischargeable, such as certain taxes or child support, you may still have to address those obligations even after declaring bankruptcy.

Additionally, South Carolina does have specific rules regarding wage garnishment limits. For instance, federal law restricts garnishments to 25% of an individual's disposable income or the amount by which their income exceeds 30 times the federal minimum wage, whichever is less. Bankruptcy can be a way to regain control over your finances by addressing these variables effectively.

Filing for bankruptcy is not a decision to be made lightly. It can have long-term effects on your credit and financial future. Seeking the guidance of a qualified bankruptcy attorney can help you assess your situation, understand your options, and navigate the complexities of the bankruptcy process.

In summary, yes, bankruptcy can stop wage garnishments in South Carolina. By filing for either Chapter 7 or Chapter 13 bankruptcy, individuals can initiate an automatic stay that protects their wages from being garnished. It's crucial to consult with a legal professional to determine the best course of action for your specific financial circumstances.