Protecting Bank Accounts from Creditors in SC

Do you need the help of an experienced bankruptcy attorney in SC to help protect your bank account assets? The Stone Law Firm can help you protect your assets from being seized or frozen. One way a creditor can enforce a legal judgment against a debtor is to legally attach the judgment to the debtor’s bank account by means of a bank levy. This will either freeze the money in the account, making the funds inaccessible to the debtor, or result in an immediate withdrawal of funds to pay the creditor. South Carolina law permits creditors to execute bank levies against debtors, but exempts certain types of accounts and monies from seizure. The procedure in South Carolina to obtain funds in an account is usually via a supplemental hearing in state Equity Courts to enforce a civil judgment against a debtor.

Exempt Property

South Carolina state statutes allow a creditor to seize the property of a debtor after winning a judgment, with certain restrictions. For instance, debtors who own their residence can protect their home from seizure by means of a homestead exemption. If a debtor does not have or use a homestead exemption, he can have up to $6,700 (As of 2023) of cash deposits in a bank account exempted from seizure. This exemption is for any kind of cash deposit account, and the funds can be from any legal source.

Exemptions By Source

In addition to the blanket $6,700 exemption, money in a bank account may be exempt from levy actions depending on its source. Exempt sources include Social Security benefits; unemployment compensation benefits; local public assistance benefits; veteran’s benefits; most disability benefits; and alimony or child support payments. Other exempted sources include crime victim’s reparation law awards; court awards for bodily injury of the debtor, or bodily injury or wrongful death of a dependent of the debtor; and proceeds from a life insurance policy owned by someone who claimed the debtor as a dependent.

Exemptions By Account

Certain types of monetary accounts are also exempt from bank levies in the state of South Carolina. These include individual retirement accounts, individual retirement annuities and accounts established as part of a trust, as defined by the Internal Revenue Code. Money in an account that is part of a pension plan qualified under the Employee Retirement Income Security Act of 1974 is also exempt. However, money deposited into such accounts solely to evade creditors will not be exempt.

Other Considerations

For a debtor who owns his residence, the South Carolina homestead exemption protects up to $67,100 of the property’s value against a creditor’s judgment. Although a debtor who takes the homestead exemption loses the blanket $6,700 bank account exemption, South Carolina law still allows up to $6,700 of additional exemptions for assets such as jewelry, tools or a vehicle. If the debtor does not use this exemption for such assets, she/he can instead use it toward protecting a bank account. All of these exemption amounts are subject to periodic increases to adjust for inflation.

How Can We Help?

At Stone Law Firm, our bankruptcy attorney has years of experience and is ready to guide you through the bankruptcy process or provide you with alternative options for debt relief. Bankruptcy is a solution that can allow you to be free of debt without permanently destroying your credit. Columbia bankruptcy attorney  Daniel Stone has assisted hundreds of residents in Columbia, Florence, Greenville, and throughout the state of South Carolina. An experienced bankruptcy lawyer can help you protect what matters most when it comes to your financial freedom. Don’t let debt have an extreme hold on your life. Reach out to a bankruptcy attorney in South Carolina today.

- Stone Law Firm