Info Insurance

Bankruptcy Basics

• You must have lived in South Carolina for at least six months to file bankruptcy as a resident of the state. Before filing your petition, you must complete a federally approved credit counseling session; if the session was completed more than six months before the bankruptcy filing, then you must complete a new session. Also, while you do not need an attorney to file personal bankruptcy, you might feel more comfortable navigating the complex process with the assistance of a lawyer.

Chapter 7 Income Qualification

• You must prove you do not earn enough money to repay your creditors and support your family to file a Chapter 7 case in South Carolina. The usual standard of measurement is the state’s annual median income level. As of 2011, the annual median income for a single South Carolina resident was $39,191, according to the U.S. Trustee Program. Two-member households could bring in up to $51,374 a year, while families of four could earn up to $65,655 annually. If you earn more money, you must successfully complete a federally designed means testing formula to file Chapter 7. Otherwise, you must partially repay debts in Chapter 13.

Asset Considerations

• People who file bankruptcy in South Carolina risk losing some of their assets, warns the book “How to File for Chapter 7 Bankruptcy.” State asset exemption laws allow people to preserve some of their property. As of 2011, a South Carolina resident could keep up to $53,375 in real estate equity, according to Bankruptcy Action. This figure is doubled if two people own a home and must file bankruptcy. People who do not own a home can keep up to $5,350 of cash and similar liquid assets such as banking accounts. All South Carolina bankruptcy filers can keep up to $5,350 of motor vehicle value.

Ineligible Debts

• Don’t count on including any federally issued student loans in any type of South Carolina bankruptcy. A judge may approve a rare exception if you are seriously disabled or your college went out of business or committed some provable act of fraud or negligence. You can include state, federal and local tax bills incurred more than three years prior to your bankruptcy filing. You cannot include child support, alimony, court fines or debts incurred right before filing bankruptcy.