Bill lets bankrupt SC residents hold on to $5,000 worth of guns
South Carolinians going through bankruptcy could keep $5,000 worth of their guns from creditors under a bill advanced Wednesday to the Senate Judiciary Committee.
Rep. Alan Clemmons, R-Myrtle Beach, said people who fall on hard times should not have to give up heirloom weapons passed down through generations.
“Many times our daddy’s or granddaddy’s weapons are handed down to us. In my family, there’s a prized double-barrel rabbit eared shotgun that belonged to my great-great grandfather” that’s worth $6,500, he said.
Beyond that, he said, bankruptcy should not deprive people of their constitutional right to protect themselves. That’s the angle stressed by the National Rifle Association. As initially written, Clemmons’ bill exempted up to three firearms and 3,000 rounds of ammunition. That corresponded with NRA-backed legislation in other states exempting three types of guns: handgun, rifle and shotgun.
“We’re not so much concerned with preserving family heirlooms, although I think that’s important,” said NRA lobbyist Anthony Roulette. “I don’t know how you put a value on something that could potentially save your life from a criminal attacker.”
But House members worried the original proposal would allow people to hide wealth by buying expensive antique firearms before declaring bankruptcy. So they subbed the number of guns with a dollar figure before that chamber approved the bill 98-5 last month.
Sen. Gerald Malloy, D-Hartsville, said the $5,000 will be a topic of debate in full Senate Judiciary, as that amount could exempt a lot of pistols and semi-automatic rifles. But he said he didn’t want to stall the bill with just three weeks left in the legislative session.
The U.S. Bankruptcy Court in South Carolina has ruled guns don’t fall under the state’s bankruptcy exemption for household goods. In 1987, the court ruled against a couple trying to exempt two VCRs, a Smith and Wesson .357 Magnum pistol, an Uzi 9mm semiautomatic gun, and a Ruger Mark II .22 caliber pistol.
According to the National Conference of State Legislatures, 14 states already exempt firearms from bankruptcy collections, though the specifics vary widely.
Another part of the bill is designed to help surviving spouses keep their homes.
Under the provision added during House debate, survivors can claim their deceased spouse’s homestead exemption, doubling the value exempt from creditors to $118,200 as of July 1. Currently, only one state exemption – which rises with inflation – is allowed per person.
Rep. Mandy Powers Norrell, a bankruptcy attorney, said her clients in that situation are typically widows who have never handled the family finances. They end up in bankruptcy court because they can’t pay their medical and prescription bills and then face homelessness. Currently, the home would be sold, and the survivor would get roughly $56,000 to start over.
“It’s often a very heartbreaking situation,” said Powers Norrell, D-Lancaster, the amendment’s sponsor. “If she’d only filed before her husband died, she could’ve exempted the entire home.”
Also on Wednesday, the full Senate Judiciary advanced a bill dubbed the “Second Amendment Preservation Act.” But Sen. Marlon Kimpson, D-Charleston, pledged to block floor debate using Senate rules.
The bill, which passed the House 69-27 in March, says the state won’t enforce any potential future federal law or rule that limits gun use or possession. Critics say it feeds paranoia but actually does nothing beyond making an anti-federal-government statement.
This story was originally published May 12, 2016 at 7:44 AM with the headline "Bill lets bankrupt SC residents hold on to $5,000 worth of guns."