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.

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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, but may be renewed (S.C. Code § 13-52-102).

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.

18 Comments
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  • 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. 

       

  • J
    Jo,
    Jun, 2020

    My wife has no assets in her name. We live in SC. A creditor got a judgement on her through civil court. Will she be considered judgment proof? Or can they go after me as the husband with the assets in my name?

    • 35x35
      Daniel,
      Jun, 2020

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

      If you were not party to the lawsuit, aseets you share with your wife are at risk. For example, jointly held bank accounts could be levied. If the two of you are on title to a home, a lien against her will affect you because the home willl be encumbered.                   

  • A
    Amelia Johnson,
    Apr, 2020

    Our banking institution is in Texas but we live in South Carolina. Can a debt collector garnish our banking account for amount owed?

    • 35x35
      Daniel,
      Apr, 2020

      Amelia, I am not a lawyer, so can't give legal advice. I will share some information with the understanding that it is not to be considered legal advice.

      Your question doesn't make it clear if you have been sued and a judgment issued against you. That step is required before any lender or credit card company would have authority to seize funds in your bank account. 

      Let's assume that you are sued in South Carolina over a debt that you did not pay as agreed and a judgment issued against you. The judgment holder would need to determine that your bank account is located out-of-state, in Texas, and then file paperwork in Texas that "domesticates the judgment." Once the Texas court permits it, then the judgment-holder could come after the funds in your account. The judgment-holder likely can compel you to make a statement under penalty of perjury about your assets. Not telling the truth if asked in such a forum about where you have bank accounts carries great risk.

  • E
    ernest fort,
    Apr, 2020

    if there is a court judgement against you for debt and they seize money from your checking account ,do they have to give a letter of debt cancellation in regards to the debt?

    • 35x35
      Daniel,
      Apr, 2020

      No, a letter of debt forgiveness is for accepting less than is owed on the debt. The letter explains how much was forgiven and the forgiven amount has to be declared on your tax return. A bank levy is separate from this process. If they didn't get all the money you owed in the levy they are not very likely forgiving the remaining amount.They are likely to try to levy you again.

  • T
    tahwerri,
    Mar, 2020

    Hey I got served for possible judgement from my local magistrate court from a company that bought my account from Capital One. Can they garnish my wages or bank account?

    • 35x35
      Daniel,
      Mar, 2020

      Tahwerri, I am not a lawyer, so please don't consider anything I share legal advice.

      No creditor or collection agency can garnish wages without first obtaining a judgment. It sounds like you were served paperwork for a suit against you that, if you owe the debt, will likely lead to a judgment. At that point, South Caroline collection laws govern what the creditor can do. The Palmetto State has strong consumer protections. If you were sued in SC for a debt, the judgment will not give authority to garnish wages. 

      SC also has strong protections for bank accounts. Anything in the account below $5,000 is safe from attachment. Anyting above $5,000 could be taken. This goes for any bank account on which your name appears. 

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