Jugeumgong Launches 'Debtor Recovery Support Campaign' for COVID-19 Vulnerable Groups

For Debtors Under Korea Housing Finance Corporation's Subrogation
Up to 70% Principal Repayment if Income Decreases by 15%

[Asia Economy Reporter Song Seung-seop] The Korea Housing Finance Corporation announced on the 1st that it will conduct a 'Debtor Recovery Support Campaign' to reduce the debt repayment burden on vulnerable groups affected by COVID-19 and help their economic recovery.

The target group includes debtors who have had subrogation payments made by the Housing Finance Corporation, specifically those who used bank loan products guaranteed by the Corporation (such as jeonse deposits and interim payments) but failed to repay principal and interest. For debtors with written-off claims who received emergency employment stabilization subsidies due to COVID-19, or whose income decreased by more than 15% compared to the previous year due to industrial or employment crises, the principal can be reduced by up to 70%.

Previously, there were no additional benefits such as repayment deferral or principal reduction for recipients of the COVID-19 emergency employment stabilization subsidy, but with this measure, repayment deferral benefits and an additional 10 percentage points of principal reduction limited to written-off claim debtors are added.

For written-off claim debtors confirmed to have no owned assets, the principal repayment amount will be reduced after reviewing factors such as age, delinquency period, and repayment ability.

The deadline is until the end of June, and if debt adjustment is applied for during this period, the debtor can receive a full waiver of the damages incurred after the date the Housing Finance Corporation made the subrogation payment.

Additionally, customers who previously signed installment repayment contracts with the Corporation but discontinued them can resume installment repayments by paying only one originally agreed installment. This is a significant relaxation compared to the previous requirement to repay the full overdue amount within one year from the cancellation date to reinstate the original agreement.

The initial payment ratio for the agreement is also lowered. Previously, at least 5% of the repayment amount had to be paid to enter into an installment repayment agreement. However, during the campaign period, paying only 1% of the total repayment amount allows the agreement to be made and credit information to be released.

A representative from the Housing Finance Corporation emphasized, "This measure is a direct practice of inclusive finance, aiming to ease the debt burden of ordinary citizens and provide opportunities for recovery to those in difficulty," adding, "Once credit is partially restored and creditworthiness is built, it will be possible to apply for the Corporation's guarantee anew."

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