Bankruptcy exemptions protect the equity in your property from creditors and the bankruptcy court—preventing the equity from being used to pay your creditors. Equity is the value of property after you subtract the amount of any liens against the property from its fair market value.

The equity in your home is one such asset in bankruptcy. And bankruptcy exemptions—including the homestead exemption—allow you to protect the property you will need to maintain a home and employment after bankruptcy.

Bankruptcy exemption amounts vary by state, so the amount you will be able to protect will depend on where you live and the type of bankruptcy you file (Chapter 7 or Chapter 13).

In South Carolina, bankruptcy exemptions play a crucial role in both Chapter 7 and Chapter 13 bankruptcy filings. The state allows individuals to exempt a certain amount of equity in their home through the homestead exemption. As of the knowledge cutoff in 2023, the South Carolina homestead exemption allows an individual to exempt up to $63,250 of equity in their primary residence. This amount can be doubled for married couples filing jointly if both have an ownership interest in the property. Additionally, South Carolina provides other exemptions that can protect property such as personal property, wages, pensions, public benefits, and tools of the trade. It's important to note that South Carolina does not allow the use of federal bankruptcy exemptions; instead, residents must use the state's specific exemptions. The exact amount of exemptions and the types of property that can be exempted may change, so it's advisable to consult with an attorney for the most current information and personalized advice.