South Carolina Bankruptcy Law: Can You Keep Your Home?
South Carolina bankruptcy law offers individuals facing financial distress a way to regain control of their finances. One pressing concern for many filers is whether they can keep their home when filing for bankruptcy. Understanding the implications of bankruptcy on home ownership in South Carolina is crucial for those considering this route.
Under South Carolina law, there are primarily two types of bankruptcy filings for individuals: Chapter 7 and Chapter 13. Each has different implications for asset retention, including your home.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy, often referred to as liquidation bankruptcy, aims to discharge unsecured debts. During this process, a bankruptcy trustee may sell non-exempt assets to pay creditors. However, South Carolina provides certain exemptions that may allow you to keep your home.
As of 2023, South Carolina residents can exempt up to $59,000 in equity in their primary residence. For married couples filing jointly, this exemption doubles to $118,000. This means if the market value of your home is below these amounts, you may be able to retain your home during bankruptcy. Additionally, if you have less equity than the exemption limit, it is possible to keep your home if you continue making mortgage payments.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy is designed for individuals who have a regular income and want to repay their debts over time. This type allows you to keep your home, provided you stay current on your mortgage payments as outlined in your repayment plan. Under Chapter 13, any missed payments can often be included in the repayment plan, giving you a chance to catch up without losing your home.
Moreover, Chapter 13 can protect you from foreclosure. If your home is facing foreclosure, filing for Chapter 13 can halt the process, allowing you the opportunity to negotiate with your lender and organize your finances.
Considerations Before Filing
Before proceeding with either type of bankruptcy, it’s important to assess your overall financial situation. Questions to consider include:
- What is the current market value of your home?
- How much equity do you have in the property?
- Are you current on your mortgage payments?
Additionally, seeking advice from a qualified bankruptcy attorney can provide personalized insight into your options and help you understand the nuances of South Carolina bankruptcy law.
Conclusion
In summary, whether you can keep your home under South Carolina bankruptcy law depends largely on the type of bankruptcy you file and the equity you have in your home. Chapter 7 may allow you to keep your home through exemptions, while Chapter 13 provides a pathway to retain your property and catch up on missed payments. If you're considering bankruptcy, consulting with a legal professional can help navigate these complex regulations and ensure that you protect your home while achieving financial relief.