Filing Bankruptcy in SC: A Comprehensive Guide for Residents

Understanding Bankruptcy Options

In South Carolina, individuals facing financial difficulties have the option to file for bankruptcy under different chapters of the bankruptcy code. The most common types are Chapter 7 and Chapter 13. Each has distinct processes and outcomes, catering to varied financial situations.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy, often referred to as 'liquidation bankruptcy,' is designed for individuals who cannot repay their debts. It involves the sale of non-exempt assets to pay off creditors.

• Eligibility: To qualify, debtors must pass the means test, which compares their income to the state median.
• Process: Filing includes submitting detailed financial information and attending a meeting of creditors.
• Outcome: Most unsecured debts are discharged, offering a fresh start.

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Chapter 13 Bankruptcy

Chapter 13, or 'reorganization bankruptcy,' allows debtors to keep their assets and pay off debts over a 3-5 year period.

• Eligibility: Requires a regular income to support the repayment plan.
• Process: Involves proposing a plan to repay creditors over time, which must be approved by the court.
• Outcome: Successful completion leads to the discharge of remaining unsecured debts.

The Bankruptcy Filing Process in South Carolina

Filing for bankruptcy in South Carolina involves several key steps. It's crucial to understand these to ensure a smooth process.

Gathering Necessary Documentation

Debtors need to compile a range of documents, including tax returns, pay stubs, and a detailed list of assets and liabilities.

Credit Counseling Requirement

Before filing, individuals must complete a credit counseling session from an approved agency. This helps determine if bankruptcy is the right option.

Filing the Petition

The official bankruptcy forms must be filed in the appropriate South Carolina bankruptcy court. This initiates the legal process.

Life After Bankruptcy

While bankruptcy can offer a fresh start, it also impacts credit scores and financial opportunities.

Rebuilding Credit

Post-bankruptcy, individuals should focus on rebuilding their credit. This can involve securing a secured credit card or becoming an authorized user on another account.

Understanding Future Financial Options

Though challenging, filing bankruptcy does not bar individuals from future financial success. Education and strategic planning are key.

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FAQs About Filing Bankruptcy in SC

• What is the cost of filing for bankruptcy in South Carolina?

  The cost varies, but generally includes court filing fees and attorney fees. Fee waivers or installment plans may be available based on financial circumstances.

• How long does bankruptcy remain on my credit report?

  A Chapter 7 bankruptcy can stay on your credit report for up to 10 years, while Chapter 13 typically remains for 7 years.

• Can I keep my house if I file for bankruptcy in SC?

  Yes, under Chapter 13, you can keep your home by restructuring your debts. Chapter 7 may also allow you to retain your home if it's exempt.