Can Creditors Freeze Your Bank Account in South Carolina?
Yes, creditors in South Carolina can freeze the bank accounts of those who are behind on their payments, but in most cases, they need a court judgment to do so first. One key exception applies when the debt is owed to the same bank where your account is held. Under its right of setoff, that bank may freeze or withdraw funds directly from your account to cover the unpaid debt without first obtaining a court judgment.
When a creditor obtains a bank levy, it can impose a serious financial burden on you. When a bank account is frozen, it can freeze the funds in the account or can make them available to the creditor in question. South Carolina also, however, implements certain exemptions in relation to specific accounts and assets. If you have questions or concerns regarding a bank freeze, you need skilled legal guidance. Our experienced Florence debt relief attorneys at Reed Law Firm, P.A., are on your side.
The Process of Freezing a Bank Account in Florence, SC
To freeze your bank account in Florence, the creditor must file a civil lawsuit and win a court judgment against you regarding an unpaid debt. The specific courts that hand down these judgments in Florence are the Florence County Magistrate Court and the Florence County Court of Common Pleas. The matter of which court will handle the case is determined by the amount of debt involved.
Important Exemptions
There are important legal exemptions regarding the freezing of bank accounts that can help protect your assets. For example, an individual who doesn’t claim a homestead exemption can protect up to a specific amount of cash in their bank account, as long as it is from a legal source to begin with. A homestead exemption allows a homeowner to protect their home from seizure by creditors.
Exemptions that Relate to Income
Certain sources of income are exempt from levy actions, and they include all the following:
- Social security benefits
- Veterans benefits
- Local public assistance benefits
- Most disability benefits
- Alimony payments
- Child support payments
- Reparations for crime victims
- Court awards for personal injury cases
- Proceeds from life insurance policies for named beneficiaries
These protections, however, are not absolute. When the creditor is a government entity, such as in cases involving overpaid public benefits or unpaid taxes, that agency may still be able to levy funds that would otherwise be protected from a private creditor.
Exemptions that Relate to Accounts
In South Carolina, certain types of accounts are also exempt from bank levies. Prime examples include individual retirement accounts and annuities, as well as accounts established in the name of a trust. The money held in accounts associated with pension plans that qualify under the Employee Retirement Income Security Act is also exempt. It is important to note, however, that depositing money in exempt accounts for the sole purpose of evading a creditor’s reach will not exempt the funds.
Discuss Your Concerns with Our Experienced Florence Debt Relief Lawyers Today
Our formidable Florence debt relief attorneys at Reed Law Firm, P.A., dedicate our impressive practice to helping clients throughout the State of South Carolina secure financial relief through a range of solid legal protections, and we are here for you, too. For more information about everything we can do to help, please don’t put off reaching out by contacting us online or giving our firm a call at 843-679-0077 today.
