First, let's talk about whether you qualify for Chapter 7 bankruptcy and how much it costs to file in South Carolina. These are crucial factors to consider. You may also be wondering if there are any alternatives for debt relief besides Chapter 7. It's always good to explore your options and see if there's a different path you can take. Lastly, there's some specific information you need to know about Chapter 7 bankruptcy in South Carolina. It's always good to be well-informed, especially regarding legal matters.
You can take the South Carolina Chapter 7 Calculator below to help you estimate your qualifications and cost.
Alright, let's dive in and find out how Chapter 7 works.
1) How Chapter 7 Bankruptcy Works in South Carolina
When discussing bankruptcy with many individuals, there are typically two major concerns :
- How quickly can they be debt-free
- How much it will cost
Now, when comparing different ways to find debt relief, one option often comes out on top in both areas: Chapter 7 bankruptcy. It tends to beat out alternatives like Chapter 13 bankruptcy, debt negotiation, debt management, and debt payoff planning. Let's dive into more detail to see why that may happen.
How Fast Do You Get Relief in A Chapter 7 Bankruptcy in South Carolina?
Did you know that in South Carolina, you can usually get a Chapter 7 bankruptcy discharge in as little as 120 days? It's the average time it takes to wrap up a no-asset Chapter 7 case in the state. Now, you might be wondering what "no-asset" means. It means you don't own a house or other assets exceeding the South Carolina bankruptcy exemptions. So, if you're in a situation where you don't have a lot of high equity assets, this could be a potentially helpful option.
How Much Does It Cost To File Chapter 7 Bankruptcy in South Carolina?
Nationwide, the cost for a Chapter 7 bankruptcy usually falls somewhere between $500 and $3000. The cost of filing for Chapter 7 bankruptcy can vary depending on where you're in the state. Take North Charleston and Columbia, for example. In North Charleston, you might be looking at a bankruptcy attorney fee of around $1,500, which could bump up to $2,500. There are cases where the cost to file for bankruptcy can be reduced due to a filing fee waiver. If you qualify, you may be able to have those filing fees removed. If you're curious about whether you qualify for a filing fee waiver in South Carolina, you should check out the details on the South Carolina filing fee waiver page.
How Do I Qualify For Chapter 7 Bankruptcy in South Carolina?
You may be wondering how you can qualify for Chapter 7. Before you can become debt-free, you have to pass an income evaluation. This evaluation determines if you're eligible for a bankruptcy discharge in Chapter 7.
In South Carolina, there is something called the bankruptcy means test. It will help determine if you may qualify for Chapter 7.
If you pass the means test, you can wipe away your unsecured debts. This includes medical bills, personal loans, some old income tax debt, old utility bills, credit card debts, and most personal judgments. These debts don't have any collateral tied to them, so they're a bit more forgiving when it comes to bankruptcy.
What about secured debts in Chapter 7?
If you're looking to include some secured debts, such as car loans and mortgages, Chapter 7 bankruptcy may be able to help you out. But here's the catch: you'll have to hand over the asset to the creditor. In return, the creditor will consider the asset as payment in full for the amount you owe.
Now, let's look at how you may be able to qualify for Chapter 7.
Chapter 7 Qualification
You need to know the Bankruptcy Means Test, which calculates your monthly and yearly income. It will also compare your income to the average income of others in South Carolina.
If your income is lower than the South Carolina average, you might qualify for Chapter 7 bankruptcy. There's a calculator to help you figure it out. The South Carolina Chapter 7 Bankruptcy Means Test Calculator is free. Give it a try below and see if you may meet the requirements.
My Income Exceeds The Chapter 7 Means Test Allowed in South Carolina
If your income is higher than the average income in your state, you might need to look at part 2 of the means test or consider an alternative option.
The means test is a two-part assessment, so it's not as simple as a pass-or-fail situation. Even if you "fail" the first part, you may still "pass" the second part and potentially qualify for Chapter 7 bankruptcy.
Chapter 7 Bankruptcy Income Limits
Let's discuss the South Carolina median income figures for the Means Test. These figures are adjusted periodically based on IRS and Census Bureau data. So, if you're filing for bankruptcy in South Carolina on or after April 1, 2024, you'll want to pay attention to these numbers. For starters, let's take a look at the South Carolina median income table for bankruptcy cases:
And so on, the threshold increases as the number of people in the household increases. Things get slightly different now if you have more than nine members in your household. In that case, you'll need to add $9,000 for each additional family member. Double-checking the U.S. Trustees website for the most up-to-date figures when calculating the Means Test can be a good idea.
Will I lose my belongings if I file Chapter 7 bankruptcy?
Bankruptcy exemptions ensure that certain assets are off-limits and cannot be sold to pay your debts. However, any property not covered by these exemptions may be fair game in a Chapter 7 liquidation case. It's worth noting that in Chapter 13 cases, if you have non-exempt equity in your property, you might have to pay more as part of your bankruptcy plan. For most people, their home is their most prized possession. So, let's look at the homestead exemption in South Carolina, which is a way to protect your home from bankruptcy. Now, this exemption varies depending on your age and marital status.
- If you're single and under 65, you can protect up to $60,975 of equity in your home. The exact amount applies if you're single and 65 or older.
- If you're married and under 65, the exemption doubles to $121,950, and it's the same if you're married and 65 or older.
In South Carolina, the specific law regarding the homestead exemption is S.C. Code Ann. § 15-41-30 (A)(1). It states that real property, including co-ops, can be protected up to $59,100 (or $118,200 if jointly owned). It's always a good idea to consult an attorney for the most up-to-date information on these exemptions. Remember, other bankruptcy exemptions are available in South Carolina, so it's essential to review them carefully and ensure you understand what is and is not protected. If interested, you can also find the federal bankruptcy exemptions in 11 U.S. Code §522. The National Consumer Law Center website maintains a list of federal bankruptcy exemptions that you can check out. However, remember that South Carolina doesn't allow you to use these federal exemptions. Regarding bankruptcy exemptions, staying informed and using the most current information is crucial.
Chapter 7 Bankruptcy South Carolina Pros and Cons
If you are thinking of filing a Chapter 7, it is essential to look at the pros and cons of this option:
Pros
- It can provide you with a discharge in as little as 120 days.
- You may be able to keep your home and belongings (if under exemption)
- Put a stop to debt collection lawsuits. If you've been dealing with constant harassment from creditors, this can provide much-needed peace of mind.
- It can eliminate the possibility of a deficiency. You won't be responsible for paying any remaining debt after liquidating your assets.
- Can relieve the burden of unaffordable, unsecured debt. Whether it's credit card debt, medical bills, or personal loans, bankruptcy can give you the relief you need to get back on your feet.
While bankruptcy may not be the right solution for everyone, it's worth considering if you're drowning in debt. It's essential to weigh the benefits against the challenges and consult a professional to determine the best action for your situation.
Cons
- There are income limits in place to determine if you're eligible. If your income exceeds these limits, you may not qualify for Chapter 7 and must explore other options.
- Potential risk of losing your home and other belongings. If your assets exceed the exemption limits, they may be sold off to pay your creditors.
- The impact on your credit report. Filing for Chapter 7 bankruptcy will stay on your credit report for ten years. This can make securing loans, credit cards, or even renting an apartment complex.
- Impact on your credit score. While it's true that filing for Chapter 7 bankruptcy can provide a fresh start, it can also lower your credit score. This can make it harder for you to rebuild your credit in the future.
- Non-dischargeable debt. This refers to certain types of debt that cannot be eliminated through bankruptcy. So, even if you file for Chapter 7, you may still be responsible for paying off these debts. Understanding which debts fall into this category before making decisions is essential.
- The challenge of preventing foreclosure. If you're facing the possibility of losing your home to foreclosure, filing for Chapter 7 bankruptcy may provide temporary relief. However, it's not a guaranteed solution.
Now that we've covered the pros and cons of Chapter 7 bankruptcy, it's time to explore the alternatives available in South Carolina.
2) Alternatives to Chapter 7 Bankruptcy in South Carolina
Maybe Chapter 7 is not your best choice, and you're looking for alternatives. Sometimes, people find themselves in situations where they don't qualify for Chapter 7 bankruptcy, have too many assets, or don't want to go down that road. Don't worry though, because there are other options available to you.
A) Chapter 13 Bankruptcy in South Carolina
If you make too much money for Chapter 7, you still have another bankruptcy option. Chapter 13 allows you to restructure your debts into a more manageable monthly plan. By doing so, you can hold onto your homes and vehicles. Chapter 13 bankruptcy stops foreclosures, repossessions, and even wage garnishments. It lets you catch up on mortgage payments, car payments, and tax debt over three to five years. South Carolina might also allow you to reduce unpaid child support and alimony. However, you must keep up with your regular domestic support payments to stay in Chapter 13. In a Chapter 13 plan, some debtors may even be able to lower their car loan payments and put an end to their second mortgages, but there are specific requirements for this.
Can you afford Chapter 13 bankruptcy?
If you want to figure out whether you can potentially handle a Chapter 13 bankruptcy, you might want to give the Chapter 13 calculator below a shot. It'll help you estimate whether you can manage the monthly payment.
B) Debt Relief
Maybe Chapters 7 and 13 are not for you, but you can also consider debt relief. It can be cheaper than Debt Management and Debt Payoff Planning. With debt relief, the company negotiating on your behalf can often secure a lower amount for your total debt.
If you're thinking about going for debt settlement, there are a few things you should keep in mind. First off, you'll want to consider the impact it can have on your credit score. It's also essential to weigh the pros and cons of debt settlement. And, of course, it's crucial to steer clear of any debt settlement companies that raise red flags.
C) Debt Management
So, these two types of companies help you deal with your debt: debt settlement companies and debt management companies. The main difference between them is how they negotiate with your creditors. Debt settlement companies focus on getting your creditors to agree to lower the total amount you owe. On the other hand, debt management companies work to reduce the interest rates on your debts.
One thing to consider is the time commitment. These programs usually last a few years, typically around 3 to 5 years. But here's the thing: debt management can sometimes be more expensive than debt settlement. Plus, not all creditors are willing to work with debt management companies. So, if you have personal loans, for example, those lenders might not be on board. Debt management can have some implications for your credit score. So, it would be best to remember that when deciding which option is best for you.
If you have a lot of credit card debt with high-interest rates, you could potentially bring those rates down from, let's say, 22-30% to a more manageable 10% in a debt management program.
D) South Carolina Debt Payoff Planning
Another option to consider is debt payoff planning, a strategy to help you manage your debts. Here's how:
Debt payoff planning is all about finding clever ways to reduce your expenses and throwing any extra cash you have at those debts. The goal is to avoid paying a ton of interest and get out of debt faster.
This method might not be a one-size-fits-all solution. It depends on the size of your financial hardship. We have a Savvy Debt PayOff Planner to help you explore this option. It's designed to help you prioritize your debts and develop a game plan that works for you.
3) South Carolina Chapter 7 Bankruptcy Information:
Filing for bankruptcy can be a huge step, and I understand wanting to ensure it is the right move. Here are some things to keep in mind before filing:
South Carolina Chapter 7 Bankruptcy Credit Counseling and Debtor Education Courses
When filing for bankruptcy relief under Chapter 7, you must complete a couple of essential courses. These courses play a crucial role in receiving a bankruptcy discharge. First is the credit counseling course, which you must take before filing your bankruptcy. Then, after you've filed, you'll need to complete a debtor education course. It's important to note that the United States Trustee's office has approved these courses. The Justice Department has provided a list of credit counseling agencies that offer approved courses in South Carolina. You can find the list here.
Another list of approved providers in South Carolina for debtor education courses is on the Justice Department's website. You can access that list here. The credit counseling course and the deb or education course are available online. Of course, there is a small fee associated with these courses, but considering their benefits in navigating the bankruptcy process, it may be worth it.
South Carolina Chapter 7 Bankruptcy Court Locations
One thing to remember is the 341 meetings of creditors. Many of these meetings have been happening over the phone or through Zoom since COVID-19. If you're in South Carolina, you might still need to go to the courthouse; it may depend on the county. So, let me give you the scoop on the court locations for filing bankruptcy in different districts.
District of South Carolina
If you're ever in need of some federal courthouse information, here are a few options:
- Charles E. Simons, Jr. Federal Courthouse. Located at 223 Park Avenue, S.W., in Aiken, SC.
- G. Ross Anderson Jr. Federal Building and United States Courthouse. Located at 315 South McDuffie Street, 2nd Floor in Anderson, SC.
- J. Waties Wa ing Judicial Center. It is situated at the intersection of Meeting Street and Broad Street in Charleston, South Carolina.
- Matthew J. Perry, Jr. Courthouse, located at 901 Richland Street in Columbia, South Carolina.
- McMillan Federal Building, located at 401 West Evans Street in Florence, South Carolina
- Clement F. Haynsworth Federal Building & U.S. Courthouse. This is at 300 East Washington Street in Greenville, South Carolina.
- Donald S. Russell Federal Building & U.S. Courthouse. Situated at 201 Magnolia Street in Spartanburg, South Carolina.
Chapter 7 Bankruptcy Trustees South Carolina
If you're in South Carolina looking for Chapter 7 bankruptcy trustees, we have a list broken down by bankruptcy district. Here are some of the Chapter 7 bankruptcy trustees in South Carolina:
Take a quick look at the South Carolina local bankruptcy rules. They might have a few differences from the Federal Bankruptcy Rules. It's always good to be updated on new information.
Conclusion
If you're curious whether you qualify and how much it might cost you, you can try the Chapter 7 bankruptcy means test calculator below. It'll give you an estimate of your eligibility and expenses.
Are you looking for more information on the Chapter 7 bankruptcy process? Check out our guide right here. It'll walk you through all the steps and give you a clearer picture of what to expect.
Many people hire a bankruptcy attorney when dealing with Chapter 7 or Chapter 13 bankruptcy. You may be able to file independently, but you may want to consult with an attorney or do your research. Just head over to this link to find out how to do it.