If your credit card company does not receive voluntary payment from you, it may file a lawsuit against you for the balance you owe. Should you lose the lawsuit – or not appear in court on the scheduled hearing date – the court will issue a judgment in the credit card company‘s favor. South Carolina grants special collection rights to creditors who hold a court judgment.
Although the state of South Carolina prohibits any form of wage garnishment, they do allow creditors to recover debts through bank account garnishing. Real estate liens are also automatically implemented.
Understanding Collection Methods
South Carolina law prohibits wage garnishment. It does, however, provide judgment holders with an alternate debt recovery method – bank account garnishment. Thus, a credit card company can seize any funds you keep within your bank account. Social Security payments, unemployment, child support, military annuities and veterans’ benefits are exempt from bank account garnishment under federal law – which applies to every state.
A South Carolina judgment creates an automatic lien on any real estate you own within the county where the judgment was entered. This gives your creditor a security interest in the property and prevents you from refinancing the home without first paying off the judgment.
Defining the Validity Period
A South Carolina judgment is valid for 10 years. During this period of time, the credit card company may utilize any of the additional collection rights granted to judgment holders in the state. At the end of the 10-year validity period, the judgment expires and the creditor’s ability to garnish your bank accounts or place a lien against your property expires with it.
South Carolina provides judgment creditors with the right to renew a judgment for a consecutive 10-year period provided the creditor files its renewal request before the original judgment expires.
Exploring Interest Charges
The unpaid amount of your judgment accrues interest annually. In South Carolina, the standard interest rate added to unpaid judgment balances is 12 percent. If you and the credit card company agree to a different interest rate, however, the court will honor your agreement. Calculating and collecting the proper amount of interest is the sole responsibility of your creditor – not the South Carolina court system.
Credit Damage Implications
After entering a judgment against you, the South Carolina court files a copy of the legal decision in the county’s public record. If the county’s public record is computerized, all new files are updated to a national database accessible by the credit bureaus. If the county’s records are not computerized, representatives appointed by the credit bureaus will periodically review the records and update consumer credit reports accordingly. A judgment has a derogatory effect on your credit rating and will remain on your credit file for seven years.
- Fair-Debt-Collection.com: State Garnishment Laws – South Carolina
- Federal Trade Commission: Creditors Seeking Federal Benefits in Your Bank Account?
- South Carolina Judicial Department: Magistrates Court
- Federal Trade Commission: The Fair Credit Reporting Act (Section 605/p.22)
- Showell Blades Bankruptcy Law: How Long Does a Judgment Last in South Carolina?
- FindLaw: South Carolina Interest Rates Law
- Consumer Financial Protection Bureau. "What Is a Judgment?" Accessed March 16, 2020.
- Consumer Financial Protection Bureau. "What Is a Statue of Limitations On a Debt?" Accessed March 16, 2020.
- Texas Law Help. "What Is an Affirmative Defense?" Accessed March 16, 2020.
- Federal Trade Commission. "Time-Barred Debts." Accessed March 16, 2020.
- The Florida Bar. "The Life of a Money Judgment in Florida Is Limited for Only Some Purposes." Accessed March 16, 2020.
- Virginia Law. "§ 8.01-251 Limitations on Enforcement of Judgments." Accessed March 16, 2020.
- Consumer Financial Protection Bureau. "How Long Does Negative Information Remain on My Credit Report?" Accessed March 16, 2020.
- Consumer Financial Protection Bureau. "What Is a Garnishment?" Accessed March 16, 2020.
- Consumer Financial Protection Bureau. "Can a Debt Collector Take My Social Security or VA Benefits?" Accessed March 16, 2020.
- County of Napa. "Real Property Levy - Writ of Execution." Accessed March 16, 2020.
- U.S. Marshals Service. "Service of Process: Writ of Execution." Accessed March 16, 2020.
- National Association of REALTORS®. "What Is a Property Lien? An Unpaid Debt That Could Trip Up Your Home Sale." Accessed March 16, 2020.
Ciele Edwards holds a Bachelor of Arts in English and has been a consumer advocate and credit specialist for more than 10 years. She currently works in the real-estate industry as a consumer credit and debt specialist. Edwards has experience working with collections, liens, judgments, bankruptcies, loans and credit law.