Stopping the 'Debt Inheritance'... Assemblyman Yoon Kwan-seok Proposes Amendment to the Financial Consumer Protection Act

Yoon Kwan-seok, member of the Democratic Party of Korea.

[Asia Economy Reporter Song Seung-seop] A bill to prevent the so-called 'debt inheritance' phenomenon, where children inherit debts due to the sudden death of their parents, has been proposed.

On the 8th, Yoon Kwan-seok, a member of the National Assembly's Political Affairs Committee from the Democratic Party of Korea, announced that he had introduced a revision to the Financial Consumer Protection Act aimed at preventing damages caused by debt inheritance.

The amendment defines the solicitation of insurance products directly related to loan products and having financial consumer protection effects as an exception to 'unfair solicitation acts.' Credit insurance, which compensates for outstanding loan amounts when the borrower dies, is a representative example of such insurance products.

Currently, the Financial Consumer Protection Act prohibits 'tying sales,' where some financial investment products are sold together with loan contracts. Due to concerns from financial companies, the insurance product market necessary for consumer protection has not been activated, according to Yoon Kwan-seok.

Yoon said, "According to Supreme Court statistics, from 2016 to March of this year, there have been 80 cases where minors filed for personal bankruptcy due to inheriting parental debts," adding, "The so-called debt inheritance phenomenon among debtor families, where minors unable to handle debts inherited from the death of their parents apply for personal bankruptcy, has emerged as a serious social problem."

He emphasized, "By clearly defining credit insurance that compensates for outstanding amounts as an exception to unfair solicitation acts under the Financial Consumer Protection Act, it is expected to help prevent debt inheritance."

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