South Carolina Bankruptcy

South Carolina Bankruptcy Law

South Carolina bankruptcy laws match federal laws and closely reflect the laws of other states.  South Carolina has exemptions for certain types of bankruptcy, and the state’s exemptions are often considered in between lenient and strict.  Regardless of assets taken, the bankruptcy laws do not try to prohibit a person or family from filing South Carolina bankruptcy.  In fact, the laws are there to help people and their credit in the long run.  

Like most other states, South Carolina requires people who are considering South Carolina bankruptcy to complete a credit counseling course six months before officially filing.  They must also complete a debtor education course before reaching a final settlement.  

South Carolina Bankruptcy : Personal and Corporate

Families and corporations can both file South Carolina bankruptcy under different chapters.  Although there are other chapters and options, individuals and families usually file under Chapter 7 or Chapter 13, while corporations will usually file under Chapter 11.

SC Bankruptcy : Chapter 7

This type of South Carolina bankruptcy usually applies to families or individuals with large amounts of unsecured debt and insignificant means for income.  This type of SC bankruptcy is often referred to as straight or liquidation because a person is usually left with a clean slate after a creditor obtains all the necessary assets. 

As in most other states, a person must pass a means test in order to qualify for Chapter 7.  Normally, a family’s income must fall below the state’s household average, which is $42,117.  South Carolina also has one of the highest unemployment rates within the entire country at 11.2%.  If a family is proved incapable of providing structured payments over the next years, they may file Chapter 7 and usually qualify for the following exemptions:

• $100,000 homestead for a family

• Up to 100% of earnings in some cases

• Up to $11,500 for personal property

• $5,000 for vehicle 

SC Bankruptcy : Chapter 11

If a corporation is facing economic instability, the owner may choose to file for Chapter 11.  This type of bankruptcy allows the company a grace period to reorganizes its finances, employees, and logistics in order to reduce its overall owed debt.

SC Bankruptcy : Chapter 13

If a family doesn’t qualify for Chapter 7, they may be forced to file for Chapter 13.  In some cases, a person or family may choose to file for Chapter 13 if they own a large amount of property.  A family is granted an “automatic stay” as they pay structured payments over the next three to five years, even if their home or property is in danger of foreclosure.  


If a person or family files under Chapter 7, their state and federal tax returns may be collected by a creditor.  Tax returns qualify as assets, and if they are significant, a creditor will definitely try to collect them.  If a person files Chapter 13, their tax returns are often safe and used for living expenses or implemented back into the repayment.  

Filing for South Carolina Bankruptcy

SC Bankruptcy is no easy matter, and the process is complicated and time consuming.  It’s always a good idea to try and hire a lawyer.  They can help you with submitting documents and fees in the right amount of time, and they can also help you reach the cheapest settlement with the creditors.  You can also go through a state filing service, but again, you should try your best to hire a lawyer.  

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