Can Creditors Target My Spouse’s Income for My Debt in South Carolina?

Question from Brittany, Can Creditors Target My Spouse’s Income for My Debt in South Carolina?

Answer from AI:

When you’re facing financial difficulties due to disability and have outstanding credit card debt, it’s natural to worry about the potential repercussions, especially concerning your spouse’s finances. In South Carolina, as in other jurisdictions, the specifics of your situation—such as the nature of the debt, ownership of the debt, and the state’s laws regarding marital property and debt—will significantly influence what creditors can and cannot do.

Understanding Your Liability

First, it’s important to understand the distinction between individual and joint debt. Since the credit card debt is in your name alone and your husband was only listed as an additional user (and has since been removed), this typically means the debt is considered your individual obligation. Here’s what this generally implies:

• Individual Debt: Creditors usually cannot pursue your spouse for debt that is solely in your name. This means they cannot automatically garnish your husband’s wages for your credit card debt.
• Joint Accounts: The joint checking account you mentioned could potentially be a target for creditors, as joint accounts can sometimes be accessed to satisfy debts. However, if the account only contains your husband’s income and you can prove this, there may be protections in place.

South Carolina’s Legal Stance

South Carolina is not a community property state; it operates under the equitable distribution principle for marital property. This means that in the event of a divorce, marital property is divided equitably, but not necessarily equally. However, for debt collection purposes, creditors can sometimes reach joint assets.

Key Points to Consider:

1. Marital Property: Since South Carolina does not treat all property acquired during marriage as jointly owned, your spouse’s income, especially if kept in a separate account, may be considered separate property.
2. Joint Accounts: If creditors can prove that the joint account was used to pay for the credit card debt or that it contains funds commingled with yours, they might attempt to levy or garnish the account. Documentation and clear separation of funds are crucial here.
3. Consumer Protections: Certain types of income, including disability benefits, are generally protected from garnishment. It’s important to understand how these protections apply to your joint account.

Steps You Can Take

Given your situation, here are some steps you might consider:

• Consult a Legal Professional: A lawyer specializing in debt and bankruptcy law can provide advice tailored to your specific circumstances. This is especially important for understanding your rights and potential vulnerabilities.
• Consider Separate Accounts: To protect your spouse’s income, it may be wise to maintain completely separate bank accounts, if feasible.
• Communicate with Creditors: Sometimes, explaining your situation to creditors can lead to arrangements that prevent further action, such as garnishment or levying of accounts.
• Explore Debt Relief Options: Depending on your overall financial situation, you might consider debt consolidation, settlement, or even bankruptcy as ways to manage or discharge your debts.

Conclusion

While creditors typically cannot garnish your spouse’s wages for debt that is solely in your name, joint assets like bank accounts could potentially be at risk. The specifics, however, depend on various factors, including how your finances are structured and the actions of your creditors.

It’s crucial to seek personalized legal advice to navigate your situation effectively. For more information on managing debt and understanding your rights, the Consumer Financial Protection Bureau offers resources that might be helpful.

Remember, every situation is unique, and laws can change, so consulting with a legal professional who understands South Carolina’s specific laws and how they apply to your case is the best course of action.