South Carolina Collection Laws

South Carolina collection laws | Arthur Ravenel Jr Cooper River Suspension Bridge, Charleston SC

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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?

Don't be intimidated by an aggressive debt collector. Prepare in advance by calling 800-998-7497 to speak with a Money Coach and discuss what to say and not to say in a phone call with a debt collector. Make a financial plan to avoid having this kind of problem again.

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/Type Years Statute
South Carolina statutes of limitations. Source: Bills.com
Credit card 3 S.C. Code § 15-3-530
Spoken contract 3
Written contract 3
Mortgage contract 20 S.C. Code § 15-3-120
Judgment Lien 10 S.C. Code § 15-3-600
Judgment* 10 S.C. Code § 15-3-600
* Judgments are not renewable in South Carolina, unlike other states.

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.

26 Comments
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  • Y
    Yvonne,
    Oct, 2020

    I have a judgment from a creditor that is almost 10 years old. I have found out that they have placed a lien on my property. Once the statue of limitations is passed can they renew?

    • 35x35
      Daniel,
      Oct, 2020

      Yvonne, I can't give legal advice, as I am not a lawyer, so please read my answer with the understandnig that I am not providing legal advice.

      The official website of the South Caroline Courts says the following, " Judgments in South Carolina may not be renewed. The South Carolina Supreme Court has concluded that a judgment is 'utterly extinguished after the expiration of ten years from the date of entry.'

      To me, "utterly extinguished" would cover the lien, too. However, even if the lien should come off, if you were to try and sell or refinance the property while it showed, it could impede you from achieiving your goal. Speak to the County Clerk at the court at which the judgment was issued to see if they can advise what needs to be filed to remove the lien. If the clerk can't guide you, speak with an attorney.

  • L
    Lori Spurgeon,
    Sep, 2020

    My son has a medical bill from a hospital from a few months ago. He had tried to set up reoccurring payments through his national bank but that bank refuses payment on reoccurring payments for his type of account. He has tried to rectify this with the hospital by making a one time payment which is allowed for his type of account. The hospital told him they can't accept payment because of the payment agreement and his account is showing payments with the balance declining. Will he be held liable for this debt if the hospital audits the account and finds it wasn't actually paid?

    • 35x35
      Daniel,
      Sep, 2020

      Lori, I am not a lawyer and can't give you legal advice. It seems to me that if your son has a debt and his bank is creating a barrier that prevents payment going out to pay his debt, it doesn't remove his obligation to pay the debt. 

  • L
    Linda,
    Sep, 2020

    I received a letter from an attorney about a judgement that was rendered in July. The are saying I have 15 days to pay or they can have the Sheriff take my real and personal property. My car is worth $4000 and I have nothing other than a few personal items. My husband was not on the judgement. How do they know how much (or little) I have. What happens if there isn't anything to sell? We are living in a motor home worth $14000 currently that is paid for but is only in my husbands name. Do they come to my home to see what I have?

    • 35x35
      Daniel,
      Sep, 2020

      Linda, I am not a lawyer. I will share some information but you should not consider it legal advice. 

      South Carolina, like all states, has exemptions for different types of property that protect, to a certain level, certain consumer assets. $50,000 of home equity is beyond the reach of a judgment creditor in South Carolina. The vehicle exemption is $5,000.

      It could be that personal property of value could be seized, but your home and vehicle are not subject to seizure and sale, to my understanding. They may come to your home and it may be the case that you will be asked to list your assets. A local lawyer could give you an idea of what the standard practice is in your area.

  • D
    Diane Dilworth,
    Sep, 2020

    A bill charged off of hospital..aaragon buys account. Collection agency. Does the time start all over again. Also can they charge interest?

    • 35x35
      Daniel,
      Sep, 2020

      Diane, I am not a lawyer, so the information I share is not to be considered legal advice.

      When a collection agent buys a debt it does not re-age the debt. The clock does not start over on the statute of limitations on debt. It is usually the case that they can charge interest consistent with the terms of the agreement with the original creditor, though there can be caps in place, depending on the state, for high interest debt.

  • K
    Kay,
    Jun, 2020

    Does South Carolina use the borrowing statute limitations? If someone moved from where the debt offered and is now in another state where the sol has expired or is about up, which state would be used to sue?

    • 35x35
      Daniel,
      Jul, 2020

      Kay, I can't give legal advice, as only an attorney can properly do so. Here are a couple of thoughts, with the understanding that I am not giving you legal advice.

      The details of your situation matter. What is the debt? What does the signed agreement state? When did the move take place? Was a lawsuit filed yet?. Please read our article "Which Statute of Limitations Applies" and ask a follow-up question there if you have one.

      Separately, I can say that South Carolina has strong consumer protections regarding debt colllection. Wages can't be garnished in South Carolina for debt other than debts owed to the goverment, child support, and debts that where a person had a judgment issued in a different state and then moves to South Carolina. 

       

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