Many Korean American clients consult Song Law Firm about credit card debt. Because bankruptcy stays on credit reports for 7–10 years, we always evaluate non-bankruptcy alternatives first.
Alternative 1 — Direct Negotiation (Debt Settlement)
After a period of non-payment, card issuers often accept 40–60% lump-sum settlements. Song Law Firm negotiates on the client’s behalf and provides a written settlement. Note: discharged debt may produce a 1099-C and tax consequences.
Alternative 2 — Debt Consolidation Loan
Combine multiple cards into a single lower-rate loan. Requires a certain credit score and often collateral (e.g., home equity), so this is not for everyone.
Alternative 3 — Credit Counseling Agency Debt Management Plan (DMP)
A nonprofit credit counselor structures a 3–5 year repayment with reduced interest and waived fees. Effective only if all creditors agree.
Alternative 4 — Statute of Limitations
NJ (N.J.S.A. 2A:14-1): 6 years for credit card debt.
NY (CPLR § 213): 6 years (the 2022 Consumer Credit Fairness Act prevents tolling restarts after a credit card account is sold to a debt buyer).
Statute claims must be vetted carefully — a last payment or written acknowledgment can restart the clock.
When Bankruptcy Is the Better Choice
(1) Unsecured debt exceeds 50% of annual income. (2) Suit has been filed or a wage garnishment notice received. (3) Medical or unemployment shocks make short-term recovery unrealistic. (4) Credit card debt combined with medical bills and personal loans.
FAQ
Q. Are Korean credit card debts dischargeable in U.S. bankruptcy?
Debts owed to Korean issuers are general unsecured debts and dischargeable in Chapter 7. However, enforcement against Korean assets is a separate question; if you have Korean property, coordination with Korean counsel may be necessary.
Our Commitment
Song Law Firm helps Korean American clients across NJ and NY navigate every step — pre-filing creditor negotiations, asset protection strategy, and post-discharge credit recovery — in Korean, English, and Chinese. Our team serves Fort Lee, Bergen County, Hudson County, and the broader NJ–NY metro area.
Free Consultation
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This column is for general informational purposes only and is not legal advice on any specific matter. Reading this article or contacting Song Law Firm does not create an attorney–client relationship. Please consult a qualified attorney for advice on your particular situation.
