QUESTION:  I WANT TO DECLARE BANKRUPTCY TO ELIMINATE ALL MY DEBT.  DOES DECLARING BANKRUPTCY AUTOMATICALLY ELIMINATE ALL MY DEBT, OR DO I STILL NEED TO PAY BACK SOME OF IT?

This is a very common question we receive from members of the Korean community. The short answer to this question is:  DEPENDS ON YOUR INCOME.  In essence, by filing for bankruptcy protection, you are saying that you simply cannot afford to pay back all your debt, and that you need help in either eliminating it entirely, or coming to some sort of manageable payment plan.  Prior to the bankruptcy law changes of 2005, generally, people had a choice of either filing bankruptcy under either Chapter 7 or 13, and it was exactly that – it was the choice of the debtor.  Post October 2005, the new bankruptcy laws make it a little more stringent on whether you can completely eliminate all your debt, without having to ever pay it back.  The essence of the new bankruptcy laws revolves around the idea that if you have regular income and you can pay SOME of your creditors back, you should be made to.