Debt Relief Programs
Various Debt Relief Programs in Korea
| Content | Individual Workout | Pre-workout | Before-overdue Debt Management | Individual Rehabilitation | Bankruptcy |
|---|---|---|---|---|---|
| Organization in Charge | CCRS | Bankruptcy Court | |||
| Implementation | Oct. 2002 | Apr. 2009 | Sept. 2019 | Sept. 2004 | Jan. 1962 |
| Eligible Debtor | 90+ days overdue | 31–89 days overdue | Less than 31 days overdue | Insolvent debtor with disposable monthly income | Insolvent debtor with no disposable income and property |
| Coverage of Debts | Unsecured debts owned by financial institutions under agreement | All unsecured debts (incl. tax, health care, loans from individuals) | All unsecured debts (excl. tax, health care) | ||
| Debt Limit | Unsecured ≤ KRW 500M; Secured ≤ KRW 1B |
Unsecured ≤ KRW 1B; Secured ≤ KRW 1.5B |
No limit | ||
| Repayment Period | Up to 10 years | 3–5 years | - | ||
| Reduction / Discharge of Debt | Interest fully exempted; principal reduction up to 70% (up to 90% for vulnerable) | Overdue interest fully exempted; interest rate cut 30–70% | Overdue interest fully exempted; interest cut to max. 15% (credit card ≤ 10%) | Written off after liquidation; principal reduction ~70% | Discharged after liquidation (100% written off) |
| Coverage of Secured Debt | Available | Available | Unavailable | Available | Unavailable (must be repaid by original contract) |
| Guarantor
Protection |
Guarantor protected if plan ongoing | Guarantor remains liable | |||
| Legal Effect | Private agreement between debtor and lenders | Court order (after repayment plan approval) | Court order (final judgment) | ||
| Public Record on Credit Report | Kept 1 year | None | None | Kept 1 year | Kept 5 years |