South Carolina residents may find themselves with significant debt because of a medical issue or poor money management skills. In most cases, the only way to overcome that debt is to make a large sum of money quickly. However, if that is not a realistic option, it may be possible to file for bankruptcy. In 2016, roughly 800,000 people filed for protection from creditors.
Although some South Carolina residents have struggled through challenging economic times in recent years, they may be encouraged by economic news showing that bankruptcy filings have diminished, reaching their lowest levels across the country for the last 10 years. However, there could be indicators that filings will climb again in the near future based on the data recorded for the most recent year. Statistics show that the one-year decline for the period ending in September of 2017 was the lowest annual decrease in bankruptcy filings for the last 10 years.
Debtors in South Carolina who are considering legal options to resolve their substantial debt may be interested to know that there are calls for the debt limits for Chapter 13 bankruptcy to be modified or eliminated. If such a change were to be made, it would impact individuals who do not qualify for Chapter 13 with its current limits and for whom filing for Chapter 11 would be too expensive.
Data from Wallethub indicates that consumers in South Carolina and around the country may be extending themselves too far into credit card debt. With the possible of interest rates rising in the future, individuals could be paying hundreds of dollars in extra interest payments each month. One reason why Americans are in debt is because they fail to understand the root cause of it.
South Carolina consumers sometimes find themselves overwhelmed by their financial obligations. When other debt relief efforts fail, filing for bankruptcy may be the best option for obtaining a fresh financial start. One concern for many people in Chapter 13 bankruptcy is whether they will be able to purchase or rent a new home.
Some South Carolina residents facing financial hardship are likely to wonder about the costs associated with bankruptcy. Even if a person can protect their home from foreclosure, reduce interest payments and set up manageable payments on their debt, filing expenses could sometimes make bankruptcy a worse deal than going it alone. Fortunately, bankruptcy itself is not very expensive on the front end, and the marginally higher cost of professional assistance could result in several benefits.
South Carolina residents may find that the debt relief industry doesn't operate like it did 10 years ago. This is because increased regulation has narrowed the number of companies offering debt relief services. In some cases, people have actually had a positive experience using a third party to help negotiate favorable loan terms on their behalf. However, the industry isn't necessarily as good to consumers as it claims to be.
When South Carolina consumers file for personal bankruptcy, the two principal forms are Chapter 7 and Chapter 13. With Chapter 7, a person's non-exempt assets may be liquidated with the proceeds going towards creditors. Chapter 13 allows a restructuring in which a person repays creditors over a period of three or five years. Traditional and Roth IRAs are generally safe from creditors although there is a cap on the amount while the IRS may levy future disbursements from 401(k)s. A person might also want to look into using 401(k) funds to pay the IRS. Self-employed plans are also safe and do not have a cap. However, if a person is getting distributions, this protection on various retirement plans changes.
A Chapter 13 bankruptcy case in South Carolina will give creditors an opportunity to make a claim with the court so that they have a chance to receive payments once a court approves a bankruptcy plan. Late filers, however, could miss their chance to collect payments. A court in another state ruled in June against a creditor holding a tax lien against a couple's house because of a late claim filing.
A May bankruptcy court ruling may make it easier for South Carolina residents to get a better handle on their own debt. According to the U.S. Bankruptcy Court for the Western District of Arkansas, a couple was allowed to surrender their vehicle to their creditor and convert the unpaid balance to an unsecured debt. This was despite the fact that their Chapter 13 bankruptcy plan had already been confirmed.