Seoul Rehabilitation Court Shortens Personal Rehabilitation Repayment Period to Less Than 3 Years

[Asia Economy Reporter Seongpil Cho] The Seoul Rehabilitation Court announced on the 26th that it will establish and implement next month practical guidelines to shorten the individual rehabilitation repayment period to less than three years. This measure aligns with the purpose of the individual rehabilitation system, which aims to promptly assist financially distressed debtors and help them return to economic activities early.

According to the established guidelines, debtors who are elderly, disabled, youth, have multiple children, or are single-parent families can have their repayment period set to less than three years regardless of how much they have repaid. Until now, the Debtor Rehabilitation Act only set the individual rehabilitation repayment period to a maximum of three years. In most cases, debtors were uniformly required to repay their debts over three years without consideration of their individual circumstances.

A court official stated, "With these guidelines, the repayment burden on vulnerable debtors will be reduced, and especially, cases of debtors under 30 years old with strong recovery will increase as they return to economic activities early." Last year, youth under 30 who received individual rehabilitation commencement decisions at the Seoul Rehabilitation Court accounted for about 10.7% of all debtors.

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