Gyeonggi Financial Welfare Center Supports 1,169 Individuals in Personal Bankruptcy and Rehabilitation... 109.8% Increase Compared to Previous Year

Gyeonggi-do Community Financial Welfare Support Center Information Poster

Gyeonggi Province revealed that last year, through the Gyeonggi Financial Welfare Center for Low-Income Residents (Gyeonggi Financial Welfare Center), it supported 1,169 people with public debt adjustments such as personal bankruptcy and rehabilitation. This figure is more than double compared to the previous year.

According to the Gyeonggi Financial Welfare Center, the public debt adjustment performance last year included 1,014 cases of personal bankruptcy and 155 cases of personal rehabilitation, totaling 1,169 people, which is a 109.8% increase compared to 557 people in 2022, the center announced on the 25th.

Gyeonggi Province explained that, especially considering that the overall personal bankruptcy increase rate at the three courts in Uijeongbu, Suwon, and Incheon during the same period was only 3.4%, the increase in personal bankruptcy and rehabilitation cases was due to the activation of the center’s projects rather than an actual rise in the number of individuals filing for bankruptcy or rehabilitation.

Based on last year’s court statistics monthly report, cases routed through the Gyeonggi Financial Welfare Center accounted for 9.9% of all cases at the Suwon Rehabilitation Court and 10.5% at the Uijeongbu District Court in personal bankruptcy cases under Gyeonggi jurisdiction.

Amid rising burdens on financially vulnerable groups and debtors at their limit due to high interest rates and inflation, one out of every ten Gyeonggi residents who restarted their lives through personal bankruptcy in both the northern and southern parts of Gyeonggi was supported by the center.

Personal bankruptcy and personal rehabilitation are systems that provide opportunities for debtors who cannot repay their debts to either distribute their assets to creditors through a court decision (bankruptcy) or repay part of their monthly income over three years and be discharged from the remaining debt (rehabilitation) to restart their lives.

The Gyeonggi Financial Welfare Center released the “2023 Gyeonggi Residents’ Malignant Debt Liberation Diary,” which compiles records of 1,014 Gyeonggi residents who received personal bankruptcy discharge support last year.

According to the Liberation Diary, among the total 1,014 people, 83.8% were unemployed at the time of their personal bankruptcy application. The largest age group was those aged 50 and above, accounting for 83.6%, and 76.4% were basic livelihood security recipients. Most were living rent-free in public rental housing (84.6%) or in housing owned by acquaintances or relatives (10.3%), while only 0.5% owned their own homes. The average monthly income was below 1.5 million KRW for 82%, indicating that applicants were maintaining a subsistence-level livelihood at the time of their personal bankruptcy application.

Regarding the reasons for increased debt, which allowed multiple responses, 47.2% cited insufficient living expenses, and 20.5% cited business failure. Reasons for insolvency included principal and interest exceeding income at 32.9%, unemployment at 16.6%, business closure due to worsening management at 13.2%, and income reduction at 12%.

The majority of applicants (94.1%) had no prior experience of being accused or criminally tried for fraud, fraudulent bankruptcy, gambling, or similar offenses before applying for personal bankruptcy.

The Gyeonggi Financial Welfare Center stated that most residents who reached personal bankruptcy had unchanged income but were trapped in a vicious cycle where debts ballooned like a snowball, forcing them to borrow again to cover operating funds or living expenses.

The Gyeonggi Financial Welfare Center was established in July 2015 as a commissioned project of Gyeonggi Province and currently operates 19 regional centers within the province. Since its opening, it has supported 4,586 people with malignant debts totaling 1.6708 trillion KRW through legal discharge and other assistance.

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