Wage garnishment is common way creditors can collect from debtors who do not pay. The creditor obtains a court order that causes part of the debtor’s wages or salary to be sent instead to the creditor, to satisfy a legally recognized debt.
This common remedy is significantly limited in South Carolina. South Carolina exempts a debtor’s wages or salary resulting from his or her “personal service” (e.g. from working) garnishment.
However, while wages and salaries are exempt, other sources of income (including, for example, rent) or other money belonging to or owed to a debtor, which is in the hands of a third party “garnishee,” is potentially subject to garnishment. (Though as discussed below, many other sources of income are also exempt from garnishment in South Carolina.)
Be aware that under certain circumstances, a South Carolina debtor could have his or her wages garnished by a different state’s court if there is some connection to that state. If that happens, the garnishment will be governed by the laws of the other state.
South Carolina Garnishment Exemptions and Non-Exemptions
Besides the complete exemption for salary and wages, broad exemptions are available for many other types of income, under either federal or South Carolina law. Some of the main ones are:
- Social Security: federal law makes Social Security essentially exempt from garnishment except for child support, alimony, and like taxes. South Carolina law then goes further, and makes Social Security entirely exempt from garnishment.
- Pensions: South Carolina provides broader-than-average protection for retirement benefits of various kinds, including public employee, police, and firefighter pensions, as well as private retirement benefits or distributions from retirement accounts.
- Public benefits or assistance: most of the main forms of public assistance or benefits enjoy protection from garnishment, such as unemployment compensation, worker’s compensation, crime victim’s compensation, general assistance and local public assistance, aid to families with dependent children, veteran’s benefits, and aid to the aged, blind, and disabled.
- Insurance or annuity benefits: disability and health benefits are protected; so are fraternal society benefits; and life insurance under some circumstances.
Since South Carolina does not allow wage garnishment, the maximum threshold for wage or salary garnishment is 0%.
For other forms of income, to the extent not specifically made exempt, federal law should apply. That would allow the lesser of the following to be garnished:
- 25% of disposable income
- The amount by which a debtor’s weekly income exceeds 30 times the minimum wage
“Disposable income” for garnishment purposes is all income less only payroll exemptions required by law. Of course, payroll exemptions will typically not apply to non-wage, non-salary income. Therefore, almost all income that is not exempted from garnishment would be considered “disposable income.”
Note that since the federal standard for how much can be garnished is the most common one in the United States, if a South Carolina debtor is garnished in or by another state, odds are good that he or she will face having 25% of his or her disposable income (including wages or salary; most states allow wage garnishment) garnished.
Statute of Limitations
For many consumer actions or debts, South Carolina has a short statute of limitations (or time to sue): for most written contracts, oral or verbal contracts, and open accounts (credit card), the lawsuit must be brought within 3 years. There is one type of formal contract—not often used—called a “sealed instrument” for which the statute of limitations is 20 years(!).
Court judgments must be enforced within 10 years, whether they issued from a domestic court (a South Carolina court) or a foreign court (anyplace but South Carolina).
Important: the South Carolina bar on wage or salary garnishment does not does not make a South Carolina debtor “judgment proof.” As discussed previously, non-wage and non-salary sources of income (to the extent they are not otherwise made exempt) could be garnished; or property could be seized or made subject to a lien. South Carolina debtors should always remember that creditors have a number of mechanisms available to collect on debts.
Writ of Garnishment
While there are no wage garnishment writs in South Carolina, there are other ways a creditor can seek to satisfy a judgment or collect on a debt—including garnishing non-wage, non-salary money in the hands of third-party garnishees. Various other garnishments, executions, attachments, and liens are available.
Every one of these remedies, no matter the type, is based on a previously litigated judgment: the creditor goes to court with the judgment, to ask for the remedy. The exact procedure varies by type of remedy, but in most cases, the remedy will be best challenged on procedural grounds, rather than by trying to challenge the basic fact of the debtor’s debt or obligation to pay. After all, the debtor has already had (and lost!) his or her day in court, during the previous litigation. More on Stopping Wage Garnishment in South Carolina.
Getting Legal Help
When faced with an attempt to collect on a debt through the court system, debtors should obtain legal assistance. As mentioned above, the main ways to challenge enforcement actions (including garnishment) tend to be procedural, such as by showing—
- that the judgment was improperly issued (for example, the debtor never received notice of the lawsuit, or did not receive it in time)
- the creditor is not following the approved process or procedure for the enforcement mechanism they’ve chosen
- the debt or the enforcement action is too old (violates the statute of limitations)
- the property or income is exempt or protected in some way
Not surprisingly, procedural challenges are best made by attorneys, who understand and are comfortable with legal procedure and terminology.
For more information:
South Carolina Laws[http://www.scstatehouse.gov/code/statmast.htm]
FAQ sheet about Federal garnishment rules[http://www.dol.gov/whd/regs/compliance/whdfs30.pdf]
Social security and garnishment[http://www.ssa.gov/deposit/DDFAQ898.htm]