Am I Eligible to File for Bankruptcy?
Most Florence residents are eligible to file for bankruptcy, though this depends on the type of bankruptcy you’re filing for and your prior bankruptcy history. You must also meet certain residency requirements to file in the South Carolina bankruptcy court and take advantage of state exemptions.
Always consult with the experienced Florence bankruptcy attorneys at Reed Law Firm, P.A. to determine whether you’re eligible to file for bankruptcy in South Carolina. Call (803) 726-4888 or contact our S.C. debt relief team online to schedule a confidential eligibility consultation without any impact on your credit.
Income Requirements for Bankruptcy Filings in South Carolina
Personal bankruptcy falls into two main categories. Chapter 7 traditional bankruptcy – also called liquidation – and Chapter 13 wage earner’s bankruptcy. Your income and debt level determine what type of bankruptcy you’re eligible to file for in Florence. Consider the following basic eligibility requirements:
Chapter 7 Eligibility
To qualify for Chapter 7 liquidation, you must pass the ‘means test’ if your income is more than the state median. This complicated calculation essentially takes your monthly income and compares it to your expenses, secured debts, and consumer debts. If you have enough income to pay at least some of your debts, your attorney must prove there are special circumstances to consider or help you file for Chapter 13 bankruptcy.
Chapter 13 Wage Earner’s Eligibility Requirements
This form of bankruptcy allows debtors with stable income to stop collections and restructure their debts into one affordable monthly payment over a 3-to-5-year repayment period. The length of the plan depends on your income and debts. Wage earners, including self-employed individuals, must have a stable income and less than $526,000 in unsecured debts – such as student loans, credit cards, and personal loans – and less than $1,580,125 in secured debts (homes, land, and vehicles).
Special Eligibility Requirements for Bankruptcy Filings in Florence, S.C.
Unless special circumstances apply, you must also complete credit counseling within 180 days of filing. South Carolina also has certain residency requirements. To file for bankruptcy in Florence, S.C., you must have resided in the state for more than one-half of the 180 days before filing your petition.
South Carolina also offers certain valuable state exemptions for bankruptcy petitioners, including the following:
- Home or burial plot equity up to $76,125 (doubled for married couples on jointly owned property)
- Household goods up to $6,100
- Vehicle equity up to $7,600
- Jewelry worth up to $1,525
- Wildcard amount of $7,600
- Trade tools of up to $2,275
- Retirement accounts
- Personal injury compensation
- Public assistance
If your property exceeds the exemptions, we can still file Chapter 13 instead of Chapter 7 so that you may keep your property. To prevent forum shopping for better exemptions, federal law (11 U.S.C. § 522(b)(3)) requires debtors to have lived in South Carolina for at least 730 days if they want to take advantage of state exemptions (rather than federal).
Florence Bankruptcy Eligibility Lawyers
For help determining whether you’re eligible to file for bankruptcy in South Carolina, contact the experienced Florence bankruptcy attorneys at Reed Law Firm, P.A. today. Call (803) 726-4888 or connect with our legal team online to schedule a free and confidential case analysis.
