The 'Personal Bankruptcy Decision Period' Varies by Region... 2.45 Months in Gwangju vs 9.18 Months in Jeju, Up to 4 Times Difference

From Personal Rehabilitation Procedure Initiation to Repayment Approval: Seoul Bankruptcy Court 85.5 Days vs District Courts 123.5 Days
Park Jumin "Household Debt Reaches 1800 Trillion Won... Need for System Improvement Including Establishment of Regional Bankruptcy Courts"

[Asia Economy Reporter Oh Ju-yeon] It has been revealed that the decision period for 'personal bankruptcy,' which involves distributing the remaining assets to creditors and initiating discharge procedures when an individual debtor is economically unable to repay their debts, can vary up to four times depending on the district court.

According to data submitted by the Court Administration Office to Park Ju-min, a member of the National Assembly's Legislation and Judiciary Committee from the Democratic Party of Korea, applying for personal bankruptcy at the Gwangju District Court took an average of 2.45 months in 2021, whereas at the Jeju District Court, it took an average of 9.18 months.

When listing the courts with shorter processing times in order, they were ▲Gwangju (2.45 months) ▲Seoul Rehabilitation (2.62 months) ▲Chuncheon District Court Gangneung Branch (3.30 months), while those with longer processing times were ▲Jeju (9.18 months) ▲Daejeon (8.8 months) ▲Changwon (7.9 months).

Additionally, among 15 district courts, 9 experienced longer processing times in 2021 compared to 2018.

The decision period for discharge applications, which commence after the personal bankruptcy decision, also showed significant differences among district courts. In 2021, the average discharge decision period at the Seoul Rehabilitation Court was 6.27 months, but at the Jeju District Court, it took an average of 12.55 months, more than twice as long.

Besides bankruptcy, disparities were also evident in the approval of 'personal rehabilitation,' a process where part of the debt is repaid over a long period in cases of economic failure. The personal rehabilitation procedure conducted by the court typically consists of three stages: ▲application for commencement ▲decision to commence ▲approval of the repayment plan. In 2021, the average duration from application to commencement decision at the Seoul Rehabilitation Court was 115.2 days, whereas the average for all other district courts nationwide, excluding Seoul Rehabilitation Court, was 163.5 days.

The period from the commencement decision of the personal rehabilitation procedure to the court's approval of the repayment plan was similar. The Seoul Rehabilitation Court took an average of 85.5 days, while other district courts nationwide took an average of 123.5 days.

The approval rate of personal rehabilitation repayment plans (approved cases/rehabilitation cases) also showed considerable differences depending on the court. Over the past four years, the average approval rate at the Seoul District Court was 84.9% (56,621 out of 66,635 cases), whereas the average approval rate in other regions was only 70.8% (201,472 out of 284,750 cases).

Assemblyman Park Ju-min stated, "In a situation where household debt reaches 1,800 trillion won due to the COVID-19 pandemic and the economic crisis of high exchange rates, high interest rates, and high inflation, if people do not receive proper benefits from the microfinance system depending on where they live, it means that the judicial administration authorities are neglecting their fundamental responsibilities." He emphasized, "Debt adjustment is an essential system for a sustainable economy, so it is necessary to promptly expand regional rehabilitation courts."

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