South Carolina Bankruptcy Law: How to Navigate Debt Management

Debt management can be a challenging journey, particularly in South Carolina, where the legal framework surrounding bankruptcy offers various options for individuals seeking relief. Understanding South Carolina bankruptcy law is essential for navigating your financial difficulties effectively.

In South Carolina, individuals typically consider two main types of bankruptcy: Chapter 7 and Chapter 13. Each chapter serves its unique purpose and caters to different financial situations.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy, often referred to as "liquidation bankruptcy," is designed for individuals with limited income who are unable to pay off their debts. This process allows debtors to discharge unsecured debts, such as credit card balances and medical bills. However, some assets may be liquidated to repay a portion of the debts. South Carolina provides specific exemptions to protect certain assets, such as a portion of home equity and personal property.

To qualify for Chapter 7 bankruptcy in South Carolina, individuals must pass a means test, which assesses their income against the state’s median income level. If your average monthly income is below this threshold, you may qualify for Chapter 7 relief. It’s crucial to consult with a knowledgeable bankruptcy attorney to understand your eligibility and to navigate the filing process correctly.

Chapter 13 Bankruptcy

For individuals with a regular income who wish to keep their assets, Chapter 13 bankruptcy can be a viable option. This form of bankruptcy allows debtors to create a repayment plan to pay off all or a portion of their debts over three to five years while keeping their property.

Chapter 13 is particularly beneficial for individuals facing foreclosure, as it enables them to catch up on missed mortgage payments while remaining in their home. To qualify, individuals must have a regular income and unsecured debts below $465,275 and secured debts below $1,395,875, as of the latest figures. Consult with a bankruptcy attorney to assess the right approach for your circumstances.

Understanding the Filing Process

The bankruptcy filing process in South Carolina involves several key steps. Initially, individuals must complete a credit counseling course from an approved provider before filing. This helps to evaluate your financial situation and consider alternatives to bankruptcy.

Once you have completed the course, you’ll need to gather financial documents, including income statements, tax returns, and a list of assets and liabilities. This information will aid you in filling out the bankruptcy petition and schedules accurately.

After filing, an automatic stay goes into effect, halting most collection activities, including foreclosure and garnishments. The court will then appoint a trustee to oversee the case, manage assets, and ensure the repayment process is followed.

Post-Bankruptcy Considerations