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South Carolina has some of the strictest debt collection laws in the U.S., protecting consumers from aggressive practices while holding all debt collectors accountable, including original creditors. Key highlights include:
If you’re dealing with debt in South Carolina, understanding these laws can help you navigate your rights and avoid costly mistakes.
South Carolina Debt Statute of Limitations by Debt Type
The statute of limitations sets a deadline for creditors to take legal action to collect debts. In South Carolina, the time limits depend on the type of debt, making it important for both creditors and consumers to understand these rules.
For most consumer debts - like credit card balances, medical bills, promissory notes, and oral agreements - the statute of limitations is three years, as outlined in S.C. Code § 15‑3‑530. The clock starts ticking from the date of the first missed payment.
Mortgage debt has a much longer statute of limitations - 20 years - under S.C. Code § 15‑3‑120. Contracts for the sale of goods, on the other hand, are subject to a six-year limit under S.C. Code § 36‑2‑725. If a creditor secures a judgment, they have 10 years to enforce it. Unlike many other states, South Carolina does not allow judgments to be renewed. According to the South Carolina Supreme Court, judgments are "utterly extinguished after the expiration of ten years from the date of entry".
| Debt Type | Statute of Limitations | Relevant Statute |
|---|---|---|
| Credit Card Debt | 3 Years | S.C. Code § 15‑3‑530 |
| Medical Debt | 3 Years | S.C. Code § 15‑3‑530 |
| Promissory Notes | 3 Years | S.C. Code § 15‑3‑530 |
| Oral Contracts | 3 Years | S.C. Code § 15‑3‑530 |
| Contract for Sale (Goods) | 6 Years | S.C. Code § 36‑2‑725 |
| Mortgage Debt | 20 Years | S.C. Code § 15‑3‑120 |
| Judgments | 10 Years (Non‑renewable) | S.C. Code § 15‑3‑600 |
Once the statute of limitations runs out, creditors lose the legal right to file a lawsuit. Here's what that means in practice.
When the statute of limitations expires, the debt becomes "time-barred", sometimes referred to as "zombie debt". While creditors or collectors can still contact the debtor through calls or letters, they cannot legally file a lawsuit or threaten legal action over the expired debt. If a lawsuit is filed, the debtor can use the statute of limitations as a defense, but they must assert this defense within 30 days of being served.
However, debtors need to be cautious. Making even a small payment or acknowledging the debt in writing can restart the statute of limitations clock. Attorney Tina Tran explains:
"If you admit to owing the debt or make a payment on it - even a very small payment - you may accidentally restart the statute of limitations".
For example, a $10 payment on a three-year-old credit card debt would reset the three-year period, giving creditors a new window to take legal action.
Debt collectors must proceed carefully when dealing with time-barred debts. Threatening lawsuits on expired debts could violate the Fair Debt Collection Practices Act (FDCPA). Debtors can report such violations to the South Carolina Department of Consumer Affairs or the Federal Trade Commission. For creditors and collection agencies, the safest route is to verify the debt's age before contacting the debtor and avoid any language that could be interpreted as a lawsuit threat after the statute of limitations has passed.
South Carolina's Consumer Protection Code outlines the rules for both third-party collectors and original creditors, ensuring a balance between the rights of creditors and the protections afforded to consumers.
Debt collectors in South Carolina are allowed to use specific methods to pursue debts. They can contact debtors through phone calls, mail, fax, or even in person, but only between 8:00 a.m. and 9:00 p.m.. After the first contact, they are required to send a written notice within five days. This notice must include the amount owed, the creditor's name, and clear instructions on how the debtor can dispute the debt.
Collectors are also permitted to reach out to a third party, but only once and solely to gather information about the debtor’s location or job. They are not allowed to mention the debt during these interactions. If a debtor does not respond, collectors may take legal action to obtain a judgment. This could lead to measures like placing liens on property or levying bank accounts. For debts tied to collateral, such as car loans, creditors may repossess the property if the debtor defaults - usually after 30 days.
Debt collectors must follow strict guidelines to avoid overstepping. They are prohibited from contacting debtors before 8:00 a.m. or after 9:00 p.m. unless the debtor gives explicit permission. They must also stop contacting a debtor at their workplace if the employer disapproves or if the debtor submits a written request.
Harassment is strictly off-limits. Collectors cannot use obscene language, make threats of physical harm, repeatedly call to annoy, or falsely claim authority. Misrepresenting their identity or threatening actions like arrest, imprisonment, or wage garnishment is also not allowed. This is particularly important in South Carolina, where wage garnishment is not permitted for most consumer debts. Additionally, collectors cannot send fake court documents or communicate about debts via postcards.
The South Carolina Appleseed Legal Justice Center highlights the breadth of these protections:
"South Carolina law covers third party collectors AND creditors collecting their own debts. It provides many of the same protections as the federal law."
Collectors who violate these laws face penalties ranging from $100 to $1,000 per violation, along with actual damages. Before filing a lawsuit, consumers are typically required to submit a written complaint to the Department of Consumer Affairs and wait at least 30 days.
These rules create a framework for the next section, which will explore the rights and protections available to consumers under South Carolina law.
South Carolina offers strong protections for consumers dealing with debt collection. The state's Consumer Protection Code applies to both original creditors and third-party collectors, ensuring fair practices across the board.
South Carolina provides safeguards to help consumers retain essential income and assets. Notably, the state prohibits wage garnishment for most consumer debts. This means creditors cannot take money directly from your paycheck to settle judgments for credit cards, medical bills, or personal loans. Additionally, several types of income are off-limits to creditors, including Social Security benefits, disability payments, unemployment compensation, alimony, veteran's benefits, qualifying pension plans under ERISA, and Individual Retirement Accounts (IRAs).
The state also establishes clear exemptions for physical assets, such as:
South Carolina law requires creditors to give borrowers a fair chance to resolve their debt before taking further action. Known as the Right to Cure notice, this process applies to most installment-based consumer credit agreements. Creditors must wait a specific period after a default - 10 days for standard agreements and three business days for rental-purchase agreements - before sending the notice.
The notice must include key details such as the creditor's name, address, and phone number, along with the exact amount owed and the payment deadline. According to South Carolina Code Section 37-5-110:
"If you pay the AMOUNT NOW DUE (above) by the LAST DAY FOR PAYMENT (above), you may continue with the contract as though you were not late. If you do not pay by that date, we may exercise our rights under the law."
Creditors are only required to send this notice once per contract. If you resolve the default but fall behind again, they can proceed with repossession or legal action without issuing another notice. Acting quickly when you receive a Right to Cure notice is crucial to avoid losing your assets. This system of protections works alongside compliance rules for debt buyers and collectors, ensuring consumers have clear rights and remedies.
To operate within the legal framework and maintain ethical standards, debt buyers and collectors in South Carolina must adhere to strict compliance measures. The state's Consumer Protection Code (CPC) establishes rules that go beyond federal regulations, applying to both original creditors and third-party collectors.
South Carolina takes a straightforward approach to regulating debt collection. Unlike many other states, it does not require a specific "Debt Collection Agency" license for third-party collectors. However, debt buyers and collectors acquiring rights from consumer credit, lease, or loan agreements must file a Credit Grantor Notification with the South Carolina Department of Consumer Affairs (SCDCA). This filing confirms their legal authority to collect on purchased debt.
The state also does not require a surety bond for general debt collectors. Out-of-state collectors can operate without obtaining a local license, provided they do not establish a physical presence in South Carolina. Nevertheless, they must still comply with the CPC. The SCDCA oversees and enforces consumer credit and debt collection laws across the state.
The South Carolina Consumer Protection Code imposes strict limits on debt collection practices. Attorney Tina Tran notes:
"The CPC goes above and beyond the federal Fair Debt Collection Practices Act, which only applies to third-party debt collectors. The CPC applies to anyone trying to collect a debt".
This means original creditors must follow the same rules as third-party agencies. For example, threatening wage garnishment is prohibited in South Carolina. The SCDCA explicitly states:
"garnishment is currently prohibited in South Carolina for the collection of most debts".
Violating this rule can result in statutory penalties ranging from $100 to $1,000 per infraction. Other prohibited actions include making threats, contacting consumers outside the allowed hours (before 8:00 a.m. or after 9:00 p.m.), or continuing communication after receiving a written cease request. Collectors must also send written validation notices within five days of initial contact, specifying the debt amount and the creditor's name.
Legal actions must be taken within the debt's statute of limitations. Filing lawsuits on time-barred debts can lead to counter-suits and damages. Additionally, South Carolina's "Right to Cure" notice requirements mandate that consumers receive a chance to resolve defaults before legal proceedings begin.
Technology can play a key role in reducing compliance risks by automating safeguards. For example, in February 2026, Symple Lending partnered with Gryphon AI's "Gryph for Collections" platform to enhance compliance through AI-powered tools designed to meet TCPA, CFPB, and FDCPA standards.
Automated systems can screen outreach efforts against both federal and South Carolina regulations before contact is initiated. These platforms also enforce call curfews and monitor adherence to the FDCPA’s "7-7-7" rule, which limits collectors to seven calls in seven days per debt. For digital communications like SMS and email, compliance software ensures opt-out options are included and updates "Do Not Call" lists automatically across all channels.
Modern platforms also offer secure file sharing, real-time communication, and audit-ready documentation, which help businesses avoid compliance missteps. Mitchell Drimmer, President of Axela Technologies, highlights the risks of noncompliance:
"Debt collection done wrong can be expensive... Avoid mistakes by following Fair Debt Collections laws".
This guide has outlined South Carolina's key statutes, enforcement timeframes, and strict requirements for debt collection compliance. South Carolina's Consumer Protection Code holds both original creditors and third-party agencies accountable, creating broader responsibilities compared to federal regulations.
The state's three-year statute of limitations on most consumer debts underscores the importance of verifying the age of debts before pursuing collection efforts. Attempting to collect on time-barred debts can lead to counterclaims and potential damages. Additionally, collectors must act within a 10-year window to enforce judgments, as extensions are not allowed under state law.
Penalties for violating prohibited practices range from $100 to $1,000 per violation, with intentional breaches potentially resulting in triple damages. Threats of wage garnishment, which are illegal for most consumer debts, can be particularly costly mistakes. By combining strict enforcement with strong consumer protections, South Carolina fosters a balanced and stable framework for debt collection.
The South Carolina Department of Consumer Affairs provides resources and educational materials to help professionals navigate these regulations and reduce the risk of noncompliance. Leveraging these tools can be instrumental in avoiding violations.
Understanding and adhering to South Carolina's specific requirements not only shields businesses from penalties but also upholds ethical practices in the debt collection industry. Aligning with these clear mandates ensures both compliance and integrity in operations.
Yes, in South Carolina, a creditor can withdraw money from your bank account through a bank levy, but only if they have a court judgment against you. On the other hand, wage garnishment is typically not allowed in the state, except for certain debts like unpaid taxes, federal student loans, or child support. To fully understand your rights and any protections available, it’s a good idea to review state laws or consult with an attorney.
When dealing with a collector regarding an old debt, it’s important to tread carefully. Avoid outright admitting that you owe the debt or making any promises to pay - it could potentially be used against you. Instead, request written verification of the debt to ensure its legitimacy.
Be mindful of South Carolina's statute of limitations, which generally runs for three years from the date of the last payment. To protect yourself, handle all communication in writing and keep detailed records of every interaction. Also, steer clear of any statements that could inadvertently restart the statute of limitations on the debt.
To challenge a debt, you need to request written validation from the collector. According to the Fair Debt Collection Practices Act (FDCPA), collectors are required to send you a notice within five days of their initial contact. This notice should outline the amount owed and explain how you can dispute it.
If you believe the debt is not valid, send a formal dispute letter within 30 days of receiving the notice. Once the collector gets your letter, they must stop all collection efforts until they verify the debt and provide proof. Be sure to keep copies of all communications for your records.
More than a decade of Ivan's career has been dedicated to Finance, Banking and Digital Solutions. From these three areas, the idea of a fintech solution called Debepxert was born. He started his career in Big Four consulting and continued in the industry, working as a CFO for publicly traded and digital companies. Ivan came into the debt industry in 2019, when company Debexpert started its first operations. Over the past few years the company, following his lead, has become a technological leader in the US, opened its offices in 10 countries and achieved a record level of sales - 700 debt portfolios per year.
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