Gibson Law Firm, PA, Anderson, SC – Creditors and Debtors

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1 Creditors and Debtors


Along with our bankruptcy practice, we represent creditors and debtors in collections actions, debt restructuring, debt workouts, and consultation on financial matters. We assist creditors in complying with the collections laws and debtors in their negotiations with their creditors. HowareDebtsCollectedinSouthCarolina?

South Carolina is not a garnishment state. Only the state government of South Carolina and the Federal government can seize a South Carolina's debtor's money from the debtor's paychecks. Some exceptions to this may apply to people collecting through and for the State and Federal governments or departments. Therefore, in order to collect debts owed, most creditor must follow the general guidelines below.

First, please note that creditors must comply with many laws in the collection of their debts. The South Carolina Consumer Protection Code lists many of the requirements though others exist, e.g. the Federal Fair Debt Collection Practices Act.

Creditors must first demand payment from the debtor. If the debtor does not pay the creditor after the demand, the creditor may sue the debtor. As in all litigation, the creditor must serve legal papers upon the debtor. The debtor then generally will have 30 days to respond to the litigation (less in Claim and Delivery actions). The action will then either be litigated or settled by the parties. If the court issues a judgment, the debt owe will be recorded in the County Courthouse records. At this point the creditors will enlist the assistance of the Sheriff to enforce the judgment by seizing assets and selling them. The creditor will keep the proceeds. The Sheriff must first look to personal assets, but if these are insufficient, the debtor's real property can eventually be foreclosed upon to pay the judgments.

When debtors have given security interests in their property (such as liens on personal property or mortgages on real property), some of the procedures for collection are modified. You should not seize collateral from a debtor unless you know and can comply with the legal requirements.

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