Garnishments are stopped immediately by both Chapter 7 and Chapter 13.
Chapter 7 will not discharge the underlying student loan debt, some tax debt and tax liens causing the garnishment.
- Garnishments from judgments from consumer debt are not legal in South Carolina with the following exceptions:
- You work in another state or
- You were living in another state when the judgment was acquired or moved here during the lawsuit
If the garnishment is from tax debt assessed within the last three years or a tax lien, the garnishment may resume after Chapter 7.
- A tax lien may be valued and paid in Chapter 13 plan to stop the garnishment.
- The lien will survive on the property that you own prior to the bankruptcy.
Tax debt can be eliminated if:
It was “assessed” by the IRS more than 3 years ago and no lien has been filed.
- It was “assessed” by the IRS more than 3 years ago and no lien has been filed.
- If the tax debt was “assessed” less than 3 years ago, it must be paid in full in Chapter 13.
- This category is call “priority”.
If the tax debt was “assessed” less than 3 years ago, it must be paid in full in Chapter 13.
Both the IRS and the SC Department of Revenue can garnish wages and seize tax refunds.
Tax liens can be valued in Chapter 13.
Garnishment is, generally, illegal in South Carolina. The exception is if you were already being sued when you moved to South Carolina.
SECTION 37-5-104. No garnishment.
With respect to a debt arising from a consumer credit sale, a consumer lease, a consumer loan, or a consumer rental-purchase agreement, regardless of where made, the creditor may not attach unpaid earnings of the debtor by garnishment or like proceedings.
HISTORY: 1962 Code Section 8-800.334; 1974 (58) 2879; 1985 Act No. 121, Section 8.
SECTION 37-5-301. Wilfull violations.
(1) A lender who wilfully makes charges in excess of those permitted by applicable law is guilty of a misdemeanor and upon conviction may be sentenced to pay a fine not exceeding five thousand dollars [per instance], or to imprisonment not exceeding one year, or both.
HISTORY: 1962 Code Section 8-800.361; 1974 (58) 2879; 1976 Act No. 686 Section 41.
SECTION 37-5-106. No discharge from employment for garnishment.
No employer shall discharge an employee for the reason that a creditor of the employee has subjected or attempted to subject unpaid earnings of the employee to garnishment or like proceedings directed to the employer for the purpose of paying a judgment arising from a consumer credit sale, consumer lease, consumer loan, or a consumer rental-purchase agreement.
HISTORY: 1962 Code Section 8-800.336; 1974 (58) 2879; 1985 Act No. 121, Section 9.
SECTION 15-39-420. Withholding of wages pursuant to foreign garnishment proceeding prohibited under certain circumstances.
(1) No employer in this State shall withhold any portion of the wages of any employee residing in this State as a result of any garnishment proceedings brought in any court outside of this State unless the creditor first obtains a judgment against such employee growing out of the same indebtedness for which the garnishment proceedings were instituted in a court of competent jurisdiction in South Carolina. The burden of proving the competent jurisdiction of the court shall rest upon the creditor.
(2) The provisions of this section shall not apply to any debt incurred outside the State of South Carolina by such employee nor shall there be any garnishment of earnings for personal services rendered by the employee regardless of where the debt was incurred.
(3) Any employer violating the provisions of this section shall be deemed guilty of a misdemeanor and upon conviction shall be fined not more than one thousand dollars.
HISTORY: 1962 Code Section 10-1731.1; 1967 (55) 94; 1974 (58) 2879.