South Carolina debt collection laws: Statute of limitations and how to get out of debt

Several debt collection laws in South Carolina go above and beyond those enacted by the federal government. For example, South Carolina forbids wage garnishment to collect consumer debts, and homestead laws can shield a significant amount of your estate from creditors. 

Payday loans are still permitted, although with fewer limitations. Depending on the loan fees that your lender applies, you may be looking at Payday loan rates that go up to 400%. 

It's critical to become familiar with state legislation because they can range from being incredibly pro-consumer to letting them effectively fend for themselves.

How debt collection works in South Carolina

Even while South Carolinians may not have the highest levels of debt in the nation, the weight of having thousands of dollars in credit card debt is still present. The creditor will probably try to collect if you fall behind on your payments by calling you or writing to you. If they are unsuccessful, they'll probably try to sell the debt to a different debt collector.

South Carolina debt collection laws

1. Rules pertaining to debt collection

You may receive calls from debt collectors both at home and at your workplace. They may also get in touch with your friends, family, and neighbors, but they are not permitted to provide any details to them that might indicate that they are calling regarding a debt. They must respect your request if you ask them to stop talking to you or your employer about your debt. Additionally, according to this rule, they must get in touch with you during "reasonable hours." Unless you specify otherwise, those hours are taken to be from 8 am to 9 pm. Inform the debt collector in writing if you hire legal representation. From that point on, all communications must be made to your lawyer.

2. Rules regarding stopping debt collection calls

You may still lawfully hear from your debt collector even if you've instructed them to stop calling you in a limited number of circumstances. Particularly, you can get a notice that they’re suing you. Do not ignore the summons if this occurs. Even if you don't legally owe the amount, there is a higher likelihood that you will be held accountable if you ignore the summons.

3. Garnishment Rules

If it is determined that you owe the amount, a number of potential things could occur. First, your bank accounts might be garnished to pay off your debt. There are, however, some sums that creditors and debt collectors are prohibited from accessing under South Carolina debt collection law. The first $5,000 stored in your bank accounts is shielded from debt collectors under South Carolina law unless you're claiming the equity and interest in your house as immune from debt collection and liens, as outlined below.

Protected assets, according to debt collection laws in South Carolina, are as follows:

  • Equity of up to $50,000 in a residence where you or your dependents reside.
  • Equity of up to $50,000 in a cooperative that you or your dependents use as a residence.
  • A maximum of $50,000 equity in any burial ground you own for yourself and your dependents.
  • Up to $100,000 can be used with the first three exemptions.
  • If you share ownership of any of these properties, multiply $100,000 by your ownership fraction to determine your maximum exemption amount.
  • A maximum of $5,000 in your vehicle’s equity.
  • A maximum of $1,000 in your personal or family jewelry.
  • A maximum of $4,000 in your personal things; this includes your livestock as well.
  • Maximum $1,500 in your professional items.
  • For any of the exclusions mentioned above, there may be up to an additional $5,000 exemption in excess equity or value.
  • Value in any life insurance policy that hasn’t matured.
  • A maximum of $3,000 in firearms you own. 
  • Any compensation for settlements or reparations.
  • Value in most of the retirement plans that have tax advantages.

Other states allow for the garnishment of future wages, which means that they would be sent directly from your employer to the debt collector without ever reaching your bank account. However, South Carolina law prohibits wage garnishment for consumer debt, so that's one less thing to worry about.

South Carolina’s statute of limitations is as follows:

The statute of limitations determines how long a creditor or debt collector has to file a lawsuit against you. The debt will become time-barred if they wait any longer than that. Debt collectors cannot contact you to attempt to collect a debt that has expired and become time-barred.

Always exercise caution when committing in writing that you will pay off the debt or while making a payment, no matter how modest. By doing this, the statute of limitations will be restarted, allowing them to reopen the case.

For medical debt, the statute of limitations is three years. It is the same for credit card debt as well. For auto loan debt, it is six years, and for state tax debt, it is ten years. For collecting mortgage debt, your creditors or debt collectors have twenty years. 

In comparison to the general population of American consumers, auto debt is the second biggest worry for South Carolinians after student loans.

How you should respond to Debt collection letters

Be extremely cautious in how you respond to a collection letter. You should consult a lawyer straight away. Regardless of whether you hire the services of a lawyer or not, you should take a couple of basic steps. These steps are as follows:

  • The first thing you should do is request debt verification. Within 30 days of getting the debt notification, you must send this in writing via postal mail. After that, the debt collector has 30 days to mail you the verification, which must include the total debt owed as well as the identity and address of the original creditor. With this knowledge, you should be able to determine if the debt in question is one that you truly owe or one that has passed the statute of limitations.
  • According to FDCPA, you have the right to ask the collector to cease contacting you if the debt isn't legitimate. Although they won't be able to contact you about it, that does not imply they will stop trying to collect the debt or levy costs. Always exercise extreme caution when communicating with your debt collector, especially in writing, to avoid taking any responsibility for the invalid debt. Don't make any payments either, as doing these things could reset South Carolina's statute of limitations.
  • But if they file a lawsuit, you'll hear from them. Do not disregard this action if they take it. Attend your court date and choose a lawyer. You can report a debt collector to the FTC and the South Carolina Department of Consumer Affairs if you believe that they have harassed you, lied to you, willfully misled you, or violated any other provisions of the Fair Debt Collection Practices Act (FDCPA) or state law.

How you can get out of debt in South Carolina

If you want to get debt free in South Carolina, there are quite a few ways available. Debt consolidation is perhaps the best way to get out of debt. When you consolidate your debt, it's usually because you have consumer debt that you owe to multiple creditors or debt collectors and wish to make your payments easier, lower your interest rate, or lengthen the repayment period on your loans.

A debt consolidation program is a service that involves consolidating several loans into a single payment. The company will accept a single payment from you and distribute it to your creditors.

When you combine your debts with a debt consolidation loan, you borrow a one-time amount to settle them all at once.

Again, the primary distinction between a loan and a program is that a loan results in transferring your debt to a new loan. A program is a service that aids in paying off your debts as they currently stand, and as such, the latter is a far better option.

Closing thoughts

Recognizing that you have a problem with debt puts you on the correct track no matter how you choose to address it. Educating yourself about what you need to do as a consumer and protective legislation will help you become debt-free as quickly as possible.

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