Obtaining a Judgment

• When you owe a debt in South Carolina and fail to pay it, your creditor may take legal action by filing a lawsuit against you. You could either settle the lawsuit outside of court, answer the lawsuit or not respond to the lawsuit. In the latter two situations, your creditor will receive a judgment from the civil court in which he filed the case. If the judge finds that you owe the creditor money, he will rule in favor of the creditor. Your creditor can then gain permission from the court to go about collecting that debt by going after your assets.
  
  

South Carolina College Investment Program

• One of the most important assets that you own is a 529 plan. This plan holds such great importance because it is a step toward securing your children’s and/or grandchildren’s educational futures. Fortunately for those people who have contributed to a South Carolina College Investment Program trust fund, a creditor cannot seize these funds to satisfy his civil judgment. According to the South Carolina Code, contributions to the SCCIP trust fund are exempt from sale, garnishment, levy and attachment in satisfaction of a civil judgment or during liquidation in a bankruptcy proceeding. The policy behind this rule is that South Carolina wants as many of its residents as possible to obtain higher education.
  
  

Purpose of the Program

• The state created the South Carolina College Investment Program for the purpose of providing wide and affordable access to higher education for the state’s residents; providing a program that complies with Section 529 of the Internal Revenue Code; encouraging attendance at institutions of higher education and encouraging saving to meet that goal; providing assistance in creating trust funds to help qualified students finance their educations; and providing an investment program for those seeking education beyond the a bachelor’s degree.
  
  

Other 529 Plans

• South Carolina does not protect 529 plans created outside of the SCCIP trust fund. Therefore, if you have set aside funds to help with the cost of higher education, these funds may be subject to creditors who are looking to collect civil judgments from you. If your creditor finds that you have funds put away in a 529 plan, he can seize these funds.