A wage garnishment order allows creditors to take money directly from your paycheck. Most of the time, this is only possible after a court has entered a judgment. Here's how South Carolina regulates wage garnishments.
Written by Upsolve Team.
Updated July 26, 2023
Wage garnishment is a collection tool creditors use to collect debts. It’s mostly governed by state law. The laws in the Palmetto State severely limit which creditors can use wage garnishment to collect South Carolina residents’ debt.
South Carolina state law prohibits creditors from garnishing your wages to collect past-due consumer debts like credit card debt or medical bills. Wage garnishment is only allowed when you owe money to the state or federal government or you owe money for child or spousal support. It’s also allowed if there's a valid garnishment order from another state that was issued when you resided there but later moved to South Carolina. This article will take a closer look at the wage garnishment process in South Carolina.
What Is Wage Garnishment?
Wage garnishment is a collection tool creditors use to collect a debt by withholding funds directly from your paycheck. As a legal procedure, garnishment is mostly governed by state law, though federal law limits how much a creditor can garnish from your earnings.
In most states, creditors must sue you and win to get a court judgment and an order to garnish your wages. They then serve the order on your employer. Your employer is called the garnishee and they are then required to withhold money from your paycheck based on the state and federal formulas. But like its neighbor, North Carolina, South Carolina is one of the only states in the country where creditors can’t garnish your wages to collect on consumer debts. Despite being illegal, debt collectors still threaten and even attempt to use wage garnishment in the Gamecock State.
Government creditors that are seeking payment for certain debts like back taxes, child support, or student loans can legally garnish your wages in limited circumstances without a judgment or court order.
Who Can Garnish My Wages in South Carolina?
South Carolina law states that South Carolina residents can’t have their wages garnished for consumer credit, including leases, loans, and rental-purchase agreements. Creditors, debt collectors, or debt buyers can still sue you and get a valid, enforceable court judgment to collect the debt. But they can’t garnish your wages in South Carolina.
There is an exception to this rule. If a creditor got a judgment or default judgment against you in another state while you resided in that state, but you later moved to South Carolina, your wages can be garnished by a lender, debt collector, debt buyer, or any other creditor for consumer debt. The practical effect of South Carolina’s law is that creditors can get a judgment against you for consumer debt, but your wages can’t be garnished to collect on that debt while you reside in South Carolina.
South Carolina allows wage garnishment in two circumstances. The first is for child support and alimony. The second is for unpaid state taxes. In both instances, the government or state agency can garnish your wages without a judgment. Federal law also allows creditors to garnish wages for federal tax debts and student loans without getting a court judgment. This article will focus on the wage garnishment process for private debts that require creditors to get a judgment before garnishing your wages.
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South Carolina Wage Garnishment Process
If a creditor gets a garnishment order in another state and wants to use it to garnish the wages of an employee who now resides in South Carolina, they can’t do so until they get a judgment from a South Carolina court. This means that a valid, enforceable wage garnishment from an out-of-state court for consumer debt in South Carolina must be supported by a South Carolina court order.
If you’re sued by a creditor in South Carolina for a consumer debt, it’s important to answer the complaint served with the summons. If you don’t answer the lawsuit, the court will award the plaintiff a default judgment. This means the creditor wills the case by default since you didn’t show up to defend yourself.
When a court orders a parent to pay child support, there’s an automatic income withholding order. The South Carolina Department of Social Services will send a notice to withhold wages to the employer. An employer in South Carolina must honor a notice to withhold child support payments from the following entities:
South Carolina Department of Social Services
Clerks of Court in South Carolina
Child Support Enforcement Agency in another state
The court in another state
The South Carolina Department of Revenue and IRS can garnish your wages for unpaid taxes. Both use an administrative garnishment process that doesn’t require a court order.
Federal Student Loans
The U.S. Department of Education uses an administrative garnishment process that doesn’t require a court order to garnish wages for delinquent student loans.
How Much of My Paycheck Can Be Taken by Wage Garnishment?
If you have your wages garnished, the total amount taken from your paychecks can’t exceed the judgment plus interest, fees, and costs. For each paycheck, the amount of an individual garnishment is limited by exemptions. South Carolina law details a list of exemptions for property, including financial accounts. Several types of income are subject to federal exemptions, including Social Security, veterans benefits, workers’ comp, and many others. Wage garnishment orders will list the maximum percentage of disposable income that can be garnished, accounting for any exemptions.
The amount of any single wage garnishment is based on disposable earnings, which are the earnings that remain after taxes and other legally required expenses are deducted from your paycheck. Legally required deductions by the government include federal income tax, Social Security tax, Medicare, and others.
Federal law limits the amount of money that can be withheld from a parent’s disposable income for child support payments.
Up to 50% of an employee’s disposable earnings may be garnished for child support.
Up to 60% may be garnished if the employee is not supporting another spouse or child.
An additional 5% may be ordered withheld if payments are more than 12 weeks past due.
Student Loans & Federal Taxes
The U.S. Department of Education or any loan servicer collecting on its behalf can garnish up to 15% of your earnings. But federal law allows you to keep an amount that's equivalent to 30 times the current federal minimum wage per week. Unlike the garnishment of a student loan, the IRS is not limited in the wages it can take through garnishment. The South Carolina Department of Revenue may levy up to 25% of an employee’s income. State property exemptions are available and may reduce the amount of tax liability.
How To Stop a Garnishment in South Carolina
Creditors with an out-of-state judgment against you may be able to garnish your wages in South Carolina for a consumer debt by bringing that order to a South Carolina court. If this happens and your wages are garnished, you can either contact the creditor and make an offer to pay a negotiated settlement or file bankruptcy. If the debt is for a consumer loan like a credit card or automobile, the debt is dischargeable in bankruptcy.
Student loan, tax, and family support obligations are generally not dischargeable in bankruptcy although student loans and some taxes may be in very limited circumstances. It may also be possible to repay taxes, student loans, spousal maintenance, or child support debt with more manageable payments in a Chapter 13 bankruptcy case. Upsolve provides many useful resources for finding debt relief. This includes a tool that can help you file bankruptcy on your own without an attorney.
Are There Any Resources for People Facing Wage Garnishment in South Carolina?
If your employer has been served with an order to garnish your wages, there are self-help legal aid resources located online and throughout South Carolina, including: