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Debt Collection Laws in South Carolina

Dena Standley | August 08, 2023

Dena Standley
Legal Expert, Paralegal
Dena Standley, BA

Dena Standley is a seasoned paralegal with more than 20 years of experience in legal research and writing, having received a certification as a Legal Assistant/Paralegal from Southern Technical College.

Edited by Hannah Locklear

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Summary: The debt collection industry has seen some of the worst cases of consumer abuse. To protect consumers, the federal government has put in place laws to govern it. South Carolina has other laws that collectors in the state must obey. SoloSuit summarises these laws below.

There is no doubt debt collection is not a popular industry. Abusive debt collectors and scammers have made consumers wary. Fortunately, federal and state governments keep amending debt collection laws as needs arise. But these regulations may only help you if you are familiar with them.

For instance, the Fair Debt Collection Practices Act (FDCPA) governs debt collectors’ communications with consumers. The Fair Credit Reporting Act also controls what they can report to the consumer reporting bureaus.

This article discusses how the state of South Carolina applies the FDCPA regulations and other laws governing the debt collection process in South Carolina.

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Who is a debt collector in South Carolina?

A debt collector is anyone who regularly contacts a consumer to recover money in past-due accounts. They can be representatives of the original creditor, a third-party debt collector, debt buyers, or even law firms that regularly collect debts.

South Carolina debt collectors must follow debt collection laws

All debt collectors must adhere to South Carolina state debt collection laws and the Federal Debt Collection Practices Act. These

Debt collectors cannot sue you for a time-barred debt

Most consumer debts in South Carolina have a three-year statute of limitations, but unpaid mortgages can last up to 20 years. The clock starts from the day you miss a payment. If the debt collector does not recover that money within three years (S.C. Code § 15-3-530), they can no longer sue you.

The table below further outlines the statute of limitations on different types of debt in South Carolina.

Statute of Limitations on Debt in South Carolina

Debt Type Deadline
Credit Card 3 years
Medical 3 years
Auto Loan 3 years
Student Loan 3 years
Mortgage 3 years
Judgment 10 years
Source: S.C. Code § 15-3-530

However, debtors should take care not to revive old debts. South Carolina law states that if a debtor makes payments or admits to owing the debt, they reopen the statute of limitations, and the debt is no longer time-barred (S.C. Code § 15-3-120).

Related: Statutes of limitations for different debts in South Carolina.

Debt collectors cannot harass you

Calling you repeatedly or at odd hours to annoy you is illegal in South Carolina. A debt collector can contact you only after 8:00 am and before 9:00 pm.

Debt collectors cannot embarrass you

It is wrong for debt collectors to reveal the details of your debt to unauthorized parties. In the past, some devious debt collectors sent debtors postcards or threatened to discuss their debts with workmates and friends to embarrass them into paying the debt. The FDCPA made such actions illegal. Debt collectors can only contact other parties to locate you, never to discuss your financial matters.

Debt collectors cannot lie to you

If a debt collector lies, you can report them to the Fair Trade Commission (FTC). You can also sue them for compensation. Some false statements debt collectors make are: You will go to jail if you do not pay; they work for a credit reporting agency, and they are an attorney.

SoloSuit has various articles on how to beat most debt collectors in the country. Check out our debt collection blog to learn about fighting a specific debt collector.

Let us look at what the debt collection laws allow debt collectors to do in South Carolina.

What can debt collectors do in South Carolina?

South Carolina law allows debt collectors to call, send letters, and contact you via social media for over-due debts. If you fail to pay, they can sue you. They may consider other ways to collect if they win the lawsuit and get a judgment. Such remedies include the following:

  • Bank account levies
  • Property liens

Fortunately, South Carolina does not allow wage garnishment for consumer debts such as:

  • Credit cards
  • Car loans
  • Medical bills
  • Personal leases

Even if debt collectors with these accounts win a lawsuit, they cannot take money directly from your paycheck. The federal and state governments are the only creditors who can garnish your wages. Besides, your employer can withhold your salary for spousal and child support payments.

Remember that if you had a judgment against you while you lived in a different state and later moved to South Carolina, the creditor could follow you to collect. They, however, must obtain a court order from a South Carolina court before they can enforce the garnishment order.

Debt collectors also cannot renew debt collection judgments in South Carolina. If a decision is valid for ten years and the time lapses before the collector executes it, they cannot ask the court to renew it as they would in some states.

What happens if a debt collector sues you in South Carolina?

You can avoid receiving a debt collection lawsuit by asking the debt collector to validate the debt they claim you owe. The Debt Validation Letter should stop the calls and letters while the agency proves the debt belongs to you. Here is an example to illustrate.

Example: Daisy received several phone calls from Clear Credits asking her to pay a debt of $875, or they would sue her. She knew the debt existed but wasn’t convinced the amount was correct, as per her records. The next time they called, she told the agent she would send a Debt Validation Letter and expected to receive a written notice. After sending the letter, Clear Credits stopped contacting her again.

Draft a Debt Validation Letter in minutes.

If the collector sues you, following the steps below can help you win the lawsuit or even get them to drop it.

Always respond to a debt collection lawsuit

Ignoring a debt collection lawsuit is risky. Most debt collectors hope that you ignore your case so that they get a default judgment. Although some of your assets are exempt, you risk losing any equity above $50,000 on your primary residence or the excess of $5,000 in cash and other liquid assets.

You have 30 days in South Carolina to file your Answer. It is best to start working on it as soon as you receive the Summons. Fortunately, the state does not charge filing fees, but you may incur other court fees during the lawsuit.

The first step is to create your Answer document, which must meet the legal formatting requirements. Afterward, follow the steps below:

1. Respond to each Complaint

A debt collector states their reasons for suing you in the Complaint document. For example, they may allege that:

  1. You entered into an agreement with the company on said date
  2. You failed to pay a debt in time
  3. You did not keep other obligations as per the contract

The allegations are listed individually, and you must respond to each item. For example, you can admit or deny entering into a contract with the debt collector or original creditor mentioned in the Complaint document.

2. Assert your affirmative defenses

You also get an opportunity to defend yourself. For example, if the debt’s statute of limitations has expired, or if the debt is a result of identity theft, you should make that clear. Remember to mention all your affirmative defenses in your Answer document, as you cannot bring them up later in the case.

3. File your Answer in time

Ensure you keep the 30-day deadline, which starts from the day you receive the Summons. Aside from filing your Answer to the court, send a copy to the debt collector’s attorney.

Do not feel intimidated if the debt collector does not withdraw the lawsuit upon receiving your Answer. You can still fight them in court and win.

The bottom line

South Carolina’s debt collection laws protect you from abusive collectors. If you arm yourself with the information discussed here, you can stand against them without hiring a lawyer. SoloSuit helps consumers resolve debts at every stage. Contact us for assistance whether you are tired of debt collection calls, are facing a lawsuit, or want to settle a past-due account for less than you owe.

Related Read: How to Answer a debt collection Summons in South Carolina.

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You can use SoloSuit to respond to a debt lawsuit, to send letters to collectors, and even to settle a debt.

SoloSuit's Answer service is a step-by-step web-app that asks you all the necessary questions to complete your Answer. Upon completion, we'll have an attorney review your document and we'll file it for you.

>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate

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