Seoul Geumyung Welfare Counseling Center Clears 2.08 Trillion KRW of Citizens' Malignant Debt Over 8 Years

8th Anniversary: A Total of 42,147 Consultations with 8,272 Citizens Supported for Public Debt Adjustment and Discharge
Connecting Lawyers to Assist with Personal Bankruptcy and Rehabilitation, Linking Welfare Services such as Medical and Housing to Support Recovery

[Asia Economy Reporter Lim Cheol-young] The ‘Seoul Financial Welfare Counseling Center’ within the Seoul Welfare Foundation announced on the 19th that over the past eight years, it has provided counseling and support to 42,147 Seoul citizens, helping 8,272 individuals legally discharge a total of 2.0837 trillion KRW in malignant debt through public debt adjustment such as personal bankruptcy or rehabilitation.

The center accurately diagnoses the current situation of citizens through in-depth counseling to help those who are in a critical situation unable to repay their debts start anew. When it is determined that the debt cannot be repaid, the center connects them with lawyers from litigation support lawyer groups and the Restart Legal Support Group to assist with public debt adjustment procedures.

In particular, last year, due to the impact of COVID-19 and other factors, not only low-income groups but also the middle class faced a rapid economic crisis, leading to an increase in counseling inquiries and support. The number of people supported through public debt adjustment last year was 1,317, a 15% increase compared to the previous year (1,141). As of July this year, 807 people have received public debt adjustment support, maintaining the upward trend following last year.

In the case of personal bankruptcy, since 2017, the center has supported more than one out of every ten annual personal bankruptcy cases filed at the Seoul Rehabilitation Court each year, resolving debt adjustments.

Beyond debt resolution, the center has also linked welfare services to help debtors practically restart and prevent falling back into the debt trap. Leveraging the advantages of regional centers located in public institutions such as district offices, Employment Welfare Plus Centers, and LH Housing Welfare Branches, the center has connected welfare services related to housing, employment, and medical care.

Meanwhile, on the occasion of the center’s 8th anniversary, a survey was conducted targeting 403 citizens who actually received court discharge decisions through the center’s support. The results confirmed that resolving household debt not only helps overall mental health but that the stable situation achieved by solving debt problems also serves as a stepping stone for social recovery.

More than 70% of respondents reported experiencing fear due to debt collection and demands, and one in three respondents said they had even considered extreme measures.

The most improved aspect after resolving household debt was ‘relief from debt collection pressure,’ cited by 76% of respondents. It is analyzed that most citizens who visited the center are satisfied simply by being freed from the pressure and fear of debt collection. Additionally, 63% selected ‘psychological and emotional stability.’

The center opened in July 2013 with six regional centers, but due to explosive demand, it has expanded to operate 15 centers (a central center and 14 regional centers). In 2019, it was selected as an excellent case of civil service improvement hosted by Seoul City, and in 2020, it was recognized as an excellent case in anti-corruption and integrity, establishing itself as a public service necessary for citizens.

The center provides financial welfare services targeting Seoul citizens suffering from malignant debt, including ▲public debt adjustment (personal bankruptcy, personal rehabilitation) for managing the scale of malignant debt ▲public financial counseling and financial education ▲linkage to welfare services such as housing and employment to support recovery.

Park Jeong-man, Director of the Seoul Financial Welfare Counseling Center, said, “Over the past eight years, the Seoul Financial Welfare Counseling Center has approached household debt issues with welfare solutions to support the recovery of Seoul citizens suffering from malignant debt. It has also expanded to several local governments such as Gyeonggi and Jeonnam, establishing itself stably. We hope that any citizen struggling with household debt will contact their local financial welfare center to receive counseling and support.”

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