South Carolina Collection Laws

South Carolina Collection Laws
IN THIS ARTICLE:
  • The statute of limitations for most South Carolina debts is 3 years.
  • South Carolina exempts $5,000 from account levy.
  • South Carolina outlaws selling land or personal property with a lien attached.

Learn South Carolina's Rules For Garnishment, Liens, and Foreclosure

A lender, collection agent or law firm that owns a collection account is a creditor. The law gives creditors several means of collecting delinquent debt. But before a creditor can start, the creditor must go to court to receive a judgment. See the Bills.com article Served Summons and Complaint to learn more about this process.

The court may grant a judgment to the creditor. A judgment is a declaration by a court the creditor has the legal right to demand a wage garnishment, a levy on the debtor’s bank accounts, a lien on the debtor’s property, and in some states, ask a sheriff to seize the debtor’s personal property. The laws calls these remedies. A creditor granted a judgment is called a judgment-creditor. Which of these tools a judgment-creditor will use depends on the circumstances. We discuss each of these remedies below.

Debt Collectors Calling?

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South Carolina Wage Garnishment

The most common remedy judgment-creditors use to enforce judgments is wage garnishment. Here, the judgment-creditor contacts the debtor’s employer and require the employer to deduct a certain portion of the debtor’s wages each pay period and send the money to the creditor. However, several states — Texas, Pennsylvania, North Carolina, and South Carolina — do not allow wage garnishment for the enforcement of most judgments. In several other states, such as New Hampshire, wage garnishment is not the "preferred" method of judgment enforcement because, although possible, it is a tedious and time-consuming process for creditors.

Wage garnishment of a South Carolina resident is forbidden in any action for "consumer credit sale, a consumer lease, a consumer loan, or a consumer rental-purchase agreement, regardless of where made..." (S.C. Code §37-5-104). It is illegal for an employer to fire an employee for an attempt at wage garnishment (S.C. Code §37-5-106)

Garnishment of Social Security benefits or pensions for consumer debt is not allowed under federal or South Carolina law.

If you reside in another state, see the Bills.com Wage Garnishment article to learn more.

Levy Bank Accounts

A levy means the creditor has the right to take non-exempt money in a debtor’s account and apply the funds to the balance of the judgment. The procedure for levying bank accounts, as well as what amount, if any, a debtor can claim as exempt from the levy, is governed by state law. Many states exempt certain amounts and certain types of funds from bank levies, so a debtor should review his or her state’s laws to find if a bank account can be levied.

South Carolina law offers a list of exemptions for property, including financial accounts (S.C. Code § 15-41-30). South Carolina requires judgment-creditors to leave $5,000 in "liquid assets". "Liquid Assets" includes deposits, securities, notes, drafts, unpaid earnings not otherwise exempt, accrued vacation pay, refunds, prepayments, and other receivables.

Lien

A lien is an encumbrance — a claim — on a property. For example, if the debtor owns a home, a creditor with a judgment has the right to place a lien on the home, meaning that if the debtor sells or refinances the home, the debtor will be required to pay the judgment out of the proceeds of the sale or refinance. If the amount of the judgment is more than the amount of equity in your home, then the lien may prevent the debtor from selling or refinancing until the debtor can pay off the judgment.

In South Carolina, a judgment lien can be attached to real estate or non-exempt personal property (S.C. Code Ann. § 29-1-10 et seq). Here are property exemption amounts for South Carolina residents: (S.C. Code § 15-41-30)

  • $50,000 for a home in which the judgment-debtor resides, or up to $100,000 if the home is a jointly owned residence.
  • $5,000 in one motor vehicle.
  • $4,000 in household furnishings, household goods, wearing apparel, appliances, books, animals, crops, or musical instruments, that are held primarily for personal, family, or household use of the judgment-debtor.
  • $1,000 in jewelry held primarily for personal, family, or household use of the debtor or dependant of the debtor.
  • $1,500 interest in implements, professional books, or tools of the trade for the debtor or the trade of a dependent of the debtor.
  • $5,000 in value of an unused exemption amount to which the debtor is entitled.
  • Any unmatured life insurance contract owned by the debtor, other than credit life insurance contract.
  • Professionally prescribed health aids for Debtor or dependent of the debtor.
  • Social security benefit, unemployment compensation, local public transit benefit.
  • Veteran’s benefits.
  • Disability benefit.
  • Alimony, support, or separate maintenance.
  • Payment under a stock bonus, pension, profit sharing, annuity, or similar plan or contract on account of illness disability, death, age, or length of service.
  • An award under a crime victim’s compensation reparation law.
  • Payment on account of the bodily injury of the debtor or of the wrongful death or bodily injury of another individual of whom the debtor was a dependent.
  • Payments from a life insurance policy that insured the life of an individual of whom the debtor was a dependent on the date of that individual’s death, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor.
  • Individual Retirement Accounts
  • Pension plans that qualify under the Employee Retirement Income Security Act of 1974, as amended.

A South Carolina judgment that requires the payment of money becomes a lien upon the judgment-debtor’s real property in that county. The the judgment-debtor owns property in another county, the judgment-creditor can enter the transcript of the judgment in that county to obtain a lien. A judgment has a 10-year life. Judgments may not be renewed in South Carolina, which is different than most states. The South Carolina Courts official website says, "The South Carolina Supreme Court has concluded that a judgment is 'utterly extinguished after the expiration of ten years from the date of entry.'"

It is a criminal offense in South Carolina to sell real property or personal property that’s subject to a lien (S.C. Code § 29-1-30 and 36-9-410).

If you reside in another state, see the Bills.com Liens & How to Resolve Them article to learn more.

South Carolina Statute of Limitations

Each state or commonwealth has its own statute of limitations on civil matters. Here are some of South Carolina’s statutes of limitations for consumer-related issues:

Account/TypeYearsStatute
Credit card3S.C. Code § 15-3-530
Spoken contract3
Written contract3
Mortgage contract20S.C. Code § 15-3-120
Judgment Lien10S.C. Code § 15-3-600
Judgment*10S.C. Code § 15-3-600
* Judgments are not renewable in South Carolina, unlike other states.

South Carolina statutes of limitations. Source: Bills.com

When the statute of limitations clock starts depends on the circumstances and the particular statute. Generally, it starts when the action accrues, which means the date of breach. For credit card debt, this means the date the payment was missed. A statute of limitations clock may be paused (called "tolled") under some circumstances, or renewed (S.C. Code § 15-3-120).

South Carolina Foreclosure

A lender will foreclose judicially in South Carolina. South Carolina does not have a mortgage anti-deficiency law, although a former homeowner can ask for appraisal to reduce the deficiency balance. See S.C. Code § 29-3-7 to learn more.

Recommendation

Consult with a South Carolina lawyer who is experienced in civil litigation to get precise answers to your questions about liens, levies, garnishment, and foreclosure.

42 Comments

ddee, May, 2021

i recieved a collections letter for some medical (ER) debt. the debt is about 6 months old. it states on it that because of the age of the debt they cant sue or report to credit reports. if i set up a payment plan with them will that report to my credit ? is 6 months old enough to be outside the limitations for sueing and reporting?

JJoshua Abreu-Rosa, Aug, 2021

Hello Dee,

If you set up a payment plan to resolve the debt that should be a positive thing for your credit.  Please do not take my answer to be legal advice, as I am not an attorney and only attorneys can offer legal advice. The creditor according to the article should still be able to pursue legal action if no payment is received. However, if the agreement is not satisfied for about three years and they attempt to pursue litigation. They may not be able to.

If you are seeking ways to resolve your debt by other means. You may check out our affiliates at Freedom Debt Relief. They may be able to serve you if you call them at 800-852-1431.

Regards, Josh

JJodi Williams, Mar, 2021

I understand the 3rd stimulus check is subject to bank levy by creditors. If I have a judgment against me in SC how much money can I have in the bank at one time that they can't touch? Do the creditors have to notify me of a bank levy or is the judgment enough?

JJoshua Abreu-Rosa, Aug, 2021

Hello Jodi.

Thank you for bringing this question to us. Please, do not take my answer to be legal advice as I am not an attorney. Only attorneys can offer legal advice. 

According to the article South Carolina requires judgment-creditors to leave $5,000 in "liquid Assets" This includes deposits, securities, notes, drafts, unpaid earnings, accrued vacation pay, refunds, prepayments, and other receivables.

I feel that any funds in your bank account are at risk if your other liquid assets come to the value of $5000 or more. 


Everyone's situation is different. I would recommend speaking with a South Carolina Lawyer who can consult and provide precise answers to your questions. 

Regards, Josh

BBob, Feb, 2021

The exemptions list that you can claim liquid assets of $5900 if not claiming the homestead exemption...lets say in a bank account. If we go through a deposition and the lawyers who have a judgement against me now know where my bank accounts are located, decide to randomly levy my bank accounts where my pay check is direct deposited. Do they still have the exemption limit of $5900 or some max cap that they can levy if I am also taking the Homestead exemption? We keep a near zero balance in bank accounts for this reason but would like to know that they cant randomly do a court ordered levy on the same day that my paycheck is direct deposited.

JJoshua Abreu-Rosa, Aug, 2021

Hello Bob, 

Thank you for reaching out. Please, do not take my answer to be legal advice as I am not an attorney. Only attorneys can offer legal advice. 

I understand that once your liquid assets exceed $5,000 the creditor has the right to take any excess. 
The more exemptions you have, the greater options the creditor has to select to fund the judgment. 

I would recommend speaking to an attorney to get accurate answers to your questions. 

Regards, Josh 

LLuis, Feb, 2021

During a judgement, do you have to designate exemptions or lawyers have to the research? Also, I spoke to the Sgt. in charge of executing the property judgement and she said she could sale anything she wanted and she had no idea about exemptions, should I be worry. Can they take a vehicle with a lien holder?

JJoshua Abreu-Rosa, Aug, 2021

Hello Luis,

Thank you for reaching out. Please, do not take my answer to be legal advice as I am not an attorney. Only attorneys can offer legal advice. 

According to the article, the best practice is to learn your state laws regarding judgments.

Regards, Josh 

JJustin, Jan, 2021

How can I defend against debt collector of commercial business debt

JJoshua Abreu-Rosa, Aug, 2021

Hello Justin. 

Thank you for reaching out. Please, do not take my answer to be legal advice as I am not an attorney. Only attorneys can offer legal advice. 

Although business debtors don't enjoy the same protections as consumers and don't have the same options in the collections process, that doesn't mean a business facing financial difficulties is powerless. 

Speaking with an attorney can help you navigate debt issues and can help you regain control and find the best solution. 

Depending on your state you can use exemptions to limit the search of your creditors. Protect assets that are important to you. 

You might be able to negotiate with the creditor with a viable plan. It may give you the breathing room to stabilize operations. 

Reevaluate your cash flow. Are you underperforming or shot on cash for a period of time. If its cash flow and operations are secured or stable you may be able to secure additional cash flow to pay. 

You might need to dissolve the business if it is a separate entity such as a corporation. 

In summary, the best option for your business depends on the specifics of your situation. The amount of debt, your business history, whether any of the principals have personally guaranteed debt, whether the business is viable moving forward, and more. 

Regards, Josh