Starting Tomorrow, All Multiple-Debtor Defaulters with Reduced Income Get 1-Year Principal Repayment Deferral

Implementation of 'Credit Recovery Support System Improvement Plan'

[Asia Economy Reporter Kim Hyo-jin] Starting next month, all multiple debtors who temporarily lose their repayment ability due to unemployment, business closure, etc., will be eligible for principal repayment deferral and installment repayment.

The Credit Recovery Committee announced on the 30th that it will implement the "Credit Recovery Support System Improvement Plan" based on this content from the 1st of next month.

The Committee will support multiple debtors who have lost their jobs or closed their businesses and are in a difficult situation to repay debts with a repayment deferral before installment repayment for up to one year until their repayment ability recovers. After repayment begins, additional installment repayment support will be provided for up to 10 years.

Additionally, for unemployed youth aged 34 or younger who have been delinquent on financial debts for more than three months, the Committee will support interest-free repayment deferral before installment repayment for up to five years until they find employment. Then, they will be allowed to make installment repayments for up to 10 years.

For those who have applied for debt adjustment and are repaying other loans such as mortgage loans or jeonse deposit loans normally, excluding the debt adjustment debts, financial institutions will no longer refuse to extend the maturity or cause loss of benefit of time for other loans solely because of the debt adjustment application.

The situation where deposits seized before the debt adjustment application could not be retrieved even after the debt adjustment was confirmed will also be improved.

From now on, if a debtor’s debt adjustment is confirmed and their total deposits fall within the seizure-prohibited deposit range, such as 1.85 million KRW or less, the creditor financial institution must release the seizure upon the debtor’s request.

If the total deposit amount exceeds the seizure-prohibited deposit range, the debtor must apply directly to the court to change the seizure-prohibited claim range to retrieve the funds, as before.

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