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Is It or Isn’t It Covered? Personal Exemptions When Filing for Bankruptcy

Posted on July 26th, 2013

When filing for personal bankruptcy, many believe that creditors will lay claim to all of your possessions in order to repay debts. However, within the U.S. and South Carolina law books, there are a set of laws commonly referred to as “asset protection.”  These laws are put in place to make sure that people who have filed for bankruptcy can maintain certain assets.

There are two key provisions of asset protection; what property can and cannot be protected and who is able to apply for exemptions.

US bankruptcy exemption law includes protection for:

  • A percent of wages
  • Social Security benefits
  • Civil Service benefits (such as working for the U.S. Department of  Foreign Affairs)
  • Veterans benefits

Within South Carolina there are additional exemptions:

  • Homestead (real property including co-op) or burial plot exemption up to $53,375 with joint-owners allowed to double exemption to $106,750
  • Cash or liquid asset exemption up to $5,625 in lieu of the homestead exemption
  • Motor vehicles exemption up to $5,625
  • Tools of trade (items necessary for employment) exemption up to $1,675
  • Jewelry exemption up to $1,125
  • Wild Card (any property from unused exemptions for homestead, burial, motor vehicle, personal property, or tool of trade exemptions) up to $5,625

An individual debtor must have an ownership interest in the property in order to claim any of the above excemptions.

Exemptions for alimony, child support, disability services, pensions, and life insurance are handled on a case by case basis.  For any additional information on what exemptions you may qualify for, please contact Skinner Law Firm LLC.

4 Internal Causes of Small Business Bankruptcy

Posted on July 11th, 2013

For small businesses, there are many factors which can lead to bankruptcy. A large number of these factors are out of the business’s control, such as external market conditions, poor company location or a small customer base. However there are certain internal operations, which when poorly executed, can lead to bankruptcy.

1) Insufficient Planning

Many small businesses begin as the life-long dream of a professional who decides to leave the corporate world. Before opening a small business, potential owners should calculate start-up costs, as well as an operational budget for the first year.  Owners should also plan for worst case scenarios, such as initial low business, potential slow seasons and unforeseen accidents.

2) Low Savings

Sufficient planning is as important as having the proper savings for opening and operating a small business. Owners should be prepared to have a proper cash cushion to keep the business afloat in emergency situations. It is recommended that owners set aside six months of savings for both the business and themselves before opening.

3) Lack of Financial Discipline

When businesses are faced with low income they sometimes turn to cheap, quick-fix schemes to generate business. Unfortunately, these frequently prove to be ineffective and a waste of precious capital. The costs of these quick-fix schemes often require additional loans which only increase the business’ risk of bankruptcy.

4) Poor Accounting

In an effort to save money, some businesses will steer clear of bookkeepers in favor of balancing the books themselves. Accounting is often pushed aside amidst seemingly more important elements of the business, leaving owners in the dark about their true financial state.  Ideally, business accounting is the responsibility of one employee who can set aside time to communicate the business’ financial status to the company owner.


For more information about the causes of small business bankruptcy or how to responsibly plan for your small business, please contact Skinner Law Firm LLC.