A chapter 7 bankruptcy cases is a “liquidation” bankruptcy. This means that in a chapter 7 bankruptcy a person’s excess property can be taken from them and sold and the proceeds of the sale can be used to pay the creditors (aka the companies owed money). Although this sounds scary, it is very uncommon that anything is sold in a South Carolina bankruptcy due to exemptions. Exempt property is property that cannot be taken from a debtor and sold to satisfy debts. Said differently, a debtor gets to keep all property they can claim as exempt.
Almost all South Carolina exemptions can be found in the South Carolina Code at §15-1-30, and some of the more important exemptions are summarized in the chart below:
*These numbers are updated every 2 years.
Importantly, the numbers above only apply to a debtor’s equity in the property and not the total value of the property. Also, the above chart is not a full list of exemptions and there are many other exemptions available to debtors. Notably, retirement accounts, pensions, annuities, and payments as a result of bodily injury are completely exempt and cannot be taken from a debtor. There are other exemptions but they rarely come into play.
The financial realities of most debtors and the exemptions allowed in South Carolina result in the overwhelming majority of consumer chapter 7 bankruptcy cases being declared a “no asset case.” This means the debtor doesn’t lose any property through the bankruptcy process. In the rare case that the debtor has nonexempt property, the trustee of the bankruptcy case will often offer to let the debtor buy back their equity in the property so as to not lose the asset.
If you have questions about filing bankruptcy or would like to discuss other debt relief options, please feel free to contact us at Jason@WardLawSC.com or reach us by phone at 864-233-4566.