Bankruptcy

SC Debtors Might Be Getting Increase In Exemptions

Update: Ed Bailey, a colleague from Spartanburg, tells us that this bill has been moved out of the special laws subcommittee stamped “Favorable with Amendment.” We don’t yet know what the amendment is, but I’ll keep looking. The full Judiciary Committee will take it up on the 5th (this coming Tuesday), Ed reports.

In many states, lawmakers have opted out of the federal bankruptcy exemptions; South Carolina is one of those states. What this means: bankruptcy debtors must use state statutory exemption law to protect their assets in Chapter 7 filings. The monetary limits to those exemptions, however, have been pretty inadequate in many instances to protect all but the most minor of ownership interests.

That started to change following the 2005 bankruptcy amendments. First, the General Assembly of South Carolina upped the home ownership exemption from a pittance of $5,000 to $50,000 per person (total of $100,000 for a married couple). And now comes Bill 3816, currently in the Judiciary Committee.

Bill 3816 would increase the exemption limits on several categories of property:

• Automobiles would be increased from the currently laughable $1,200 to $6,200;
• The household furnishings exemption would go up $1,500 to $4,000
• The cash and liquid assets exemption (available only to those not claiming a homestead exemption) would rise from $1,000 to $5,000

You can see the amended bill language here.

Write to your representatives to support the new limits. You can find your representatives’ contact information by using the SC General Assembly website’s zip code search tool on this page.

© 2008 SC Bankruptcy & Consumer Law Blog.