[2020 National Audit] Up to 1-Year Difference in Personal Rehabilitation and Bankruptcy Declaration Periods by Courts Nationwide

[Asia Economy Reporter Baek Kyunghwan] It has been revealed that the period for personal rehabilitation and bankruptcy rulings varies by up to one year depending on the regional courts.

On the 7th, Park Jumin, a member of the National Assembly's Legislation and Judiciary Committee (Democratic Party of Korea, Seoul Eunpyeong-gap), analyzed data submitted by the Court Administration Office and found that the period for personal rehabilitation and bankruptcy rulings differed by up to six months and over one year, respectively, depending on the court. The approval rates for personal rehabilitation and discharge decisions also differed by about 20%, revealing that debtors receive differential treatment depending on which court they apply for debt adjustment.

In 2019, among the rehabilitation and district courts nationwide, Ulsan District Court (11.9 months) and Busan District Court (10.7 months), which took the longest time from personal rehabilitation application to repayment plan approval, showed a difference of at least four to six months compared to Seoul Rehabilitation Court (6.1 months), which tends to approve the plans the fastest.

The period from personal bankruptcy application to ruling decision showed an even greater difference. Daegu District Court took 12.3 months, more than a year, whereas Changwon District Court took 1.7 months, showing a maximum difference of about one year in the period from personal bankruptcy application to decision depending on the court.

Looking at the personal rehabilitation application approval rates by courts nationwide over the recent four years (2016?2019), Busan was 43.4%, Ulsan 48.2%, and Cheongju 49.7%, about 10 percentage points lower than the average (60.2%), and showed a difference of more than 20 percentage points compared to Seoul Rehabilitation Court, which had the highest approval rate at 73.7%.

The discharge decision rate compared to bankruptcy rulings also showed a difference of about 20 percentage points, with Chuncheon and Gangneung District Courts at 62.4%, Jeonju District Court at 65.5%, and Seoul Rehabilitation Court showing the highest decision rate at 84.8%.

Rep. Park said, "There is no basis to consider that debtors in certain regions are less diligent in debt adjustment than those in other regions, yet the speed of personal rehabilitation and bankruptcy systems and the degree to which the debtor's position is reflected vary significantly by district court. This means that debtors receive differential legal relief depending on their place of residence. The Court Administration Office should prepare improvement measures to ensure that the perspective on debtors is consistent across district courts," he emphasized.

This content was produced with the assistance of AI translation services.