Can Bank Accounts Be Frozen by Judgments in South Carolina?

Exempt Property

South Carolina state statutes allow a creditor to seize the property of a debtor after winning a judgment, with certain restrictions. For instance, debtors who own their residence can protect their home from seizure by means of a homestead exemption. If a debtor does not have or use a homestead exemption, he can have up to $5,000 of cash deposits in a bank account exempted from seizure. This exemption is for any kind of cash deposit account, and the funds can be from any legal source.

In addition to the blanket $5,000 exemption, money in a bank account may be exempt from levy actions depending on its source. Exempt sources include Social Security benefits; unemployment compensation benefits; local public assistance benefits; veteran's benefits; most disability benefits; and alimony or child support payments. Other exempted sources include crime victim's reparation law awards; court awards for bodily injury of the debtor, or bodily injury or wrongful death of a dependent of the debtor; and proceeds from a life insurance policy owned by someone who claimed the debtor as a dependent.

Certain types of monetary accounts are also exempt from bank levies in South Carolina. These include individual retirement accounts, individual retirement annuities and accounts established as part of a trust, as defined by the Internal Revenue Code. Money in an account that is part of a pension plan qualified under the Employee Retirement Income Security Act of 1974 is also exempt. However, money deposited into such accounts solely to evade creditors will not be exempt.

For a debtor who owns his residence, the South Carolina homestead exemption protects up to $100,000 of the property's value against a creditor's judgment. Although a debtor who takes the homestead exemption loses the blanket $5,000 bank account exemption, South Carolina law still allows up to $5,000 of additional exemptions for assets such as jewelry, tools or a vehicle. If the debtor does not use this exemption for such assets, she can instead use it toward protecting a bank account. All of these exemption amounts are subject to periodic increases to adjust for inflation.