Money troubles can happen to anyone. When financial distress spirals out of control, federal law offers relief in the form of bankruptcy. Backed by federal law, bankruptcy offers a fresh start. There are two main types for individuals. Chapter 7 offers the more traditional option—assets are sold, or liquidated, to pay creditors as much as possible, and remaining debts are wiped away. With Chapter 13, debts are not erased but reorganized, and a repayment plan is drawn up to span a certain amount of time.
While bankruptcy is part of federal law, each state has its own rules for filing. If you're considering filing bankruptcy in South Carolina, there are some key things you should be aware of.
Do You Know Your Bankruptcy Filing Location?
The U.S. Bankruptcy Court for the District of South Carolina serves the entire state with offices in Columbia, Spartanburg, and Charleston.
Do You Qualify for Chapter 7?
Generally speaking, to file Chapter 7 bankruptcy, your average monthly income must be less than South Carolina's median income. Those who make more than South Carolina's median income may still qualify, but only if they pass a stringent means test.
How Long Will a Chapter 13 Plan Last?
The length of your Chapter 13 repayment plan is also dependent upon income. If your average monthly income is less than South Carolina's median income, your Chapter 13 plan cannot exceed 36 months, unless you are able to prove there is good cause to extend it. If it is extended, the limit is 60 months. Those who earn equal to, or greater than, South Carolina's median income can expect a Chapter 13 plan to last about 60 months.
What Property Can You Keep?
All states have rules regarding property exemptions. Although states allow you to choose between a state list and the federal list of exemptions, in South Carolina, you must stick to state exemptions. They include:
- Real estate or co-op property valued to $53,375 if you are the single owner (multiple-owner property can be valued up to $112,275)
- Motor vehicle valued to $5,625
- Animals, crops, appliances, books, clothing, household goods, furnishings, and musical instruments valued to $4,275 total
- Jewelry valued to $1,125
- Cash and other liquid assets to $5,625.
There are also exemptions for health aids, pensions, college trust funds, public benefits, items you need for work, alimony and child support, certain types of insurance, and business partnership property.
Should You Contaact a Bankruptcy Lawyer?
For legal advice specific to your current situation, please contact a South Carolina bankruptcy lawyer.