South Carolina law exempts Fraternal Benefit Association Benefits from claims from creditors who may claim that you have to use them to pay the creditor money that is owed to them. Just because you have a benefit that is claimed comes from an organization, there are many requirements that must be met before you should assume that the benefit being paid to you is exempt.
The requirements for the money to qualify as exempt are fairly complex. I will attempt to list those requirements as follows:
REQUIREMENTS FOR AN ORGANIZATION TO QUALIFY AS A FRATERNAL ORGANIZATION WITH EXEMPT BENEFITS
- The organization must be incorporated
- The organization cannot be one that is owned by stockholders.
- Operated as a not for profit entity.
- The organization is operated solely for its members and its beneficiaries.
- There is a lodge system with ritualistic form of work
- A representative form of government
- Its members receive benefits as set forth in its rules
- The organization is a fraternal benefit society.
- There is a supreme governing body and subordinate lodges
- Each member has only one vote
THE FRATERNAL BENEFITS EXEMPTION AND BANKRUPTCY
If you file a bankruptcy under Chapter 7, Chapter 11 or Chapter 13 of the United States Bankruptcy Code, your benefit will still be protected from seizure by your creditors or a Trustee. For this reason, you will not have to worry about losing this benefit if you file bankruptcy.
KNOW WHAT YOUR RIGHTS ARE WHEN DEALING WITH CREDITORS OR PLANNING YOUR FUTURE
Planning for your future is important. You cannot make the plans you need to make without knowing all the facts and rules. Contact me, Nathan Davis, to discuss the plans to make if you are experiencing financial difficulties. Planning may help you escape your financial problems or lessen the financial impact of the financial problems.