Extension of Operation Period by 6 Months for 'Personal Delinquent Debt Purchase Fund' to Prevent Excessive Debt Collection

Considering the Economic Situation and More Until the First Half of Next Year

The Financial Services Commission and the financial sector announced on the 29th that they will extend the operation period of the 'Personal Delinquent Debt Purchase Fund' by an additional six months, operating it until the end of June next year to actively adjust debts of delinquent individual debtors and prevent excessive debt collection.

The Financial Services Commission explained that this measure comprehensively considers the current situation where demand for debt adjustment among delinquent debtors and concerns about illegal private loans are increasing due to prolonged high interest rates, high inflation, and delayed domestic demand recovery, as well as the fact that the Personal Debtor Protection Act, which regulates all processes after delinquency including the introduction of a debt collection volume cap, is in its early stages of implementation.

Previously, 10 financial associations including banks, savings banks, credit finance companies, NongHyup, SuHyup, ShinHyup, forestry, Saemaeul, life insurance, and non-life insurance, along with related organizations such as the Financial Supervisory Service and Korea Asset Management Corporation, have operated the Personal Delinquent Debt Purchase Fund since June 2020 to prevent excessive debt collection on personal delinquent debts arising from the impact of COVID-19 and to support the rehabilitation of individual debtors.

Accordingly, by the 29th of last month, approximately 150,000 cases amounting to 959.4 billion KRW of personal delinquent debts were purchased to alleviate the collection burden on delinquent debtors and support their rehabilitation.

A Financial Services Commission official stated, "We will continue to seek necessary policy measures to reduce the delinquency burden on vulnerable individual debtors and support their return to normal economic activities."

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