Bad Bank Begins Purchasing Delinquent Loans... Totaling 5.4 Trillion Won

Immediate Suspension of Collection Upon Sae-Do-Yak Fund Acquisition
Debts of Vulnerable Groups, Including Basic Livelihood Security Recipients, to Be Written Off Within the Year

The Sae-Do-Yak Fund has begun purchasing long-term delinquent loans. Starting next month, the fund plans to swiftly acquire delinquent loans held by banks, insurance companies, and public institutions.

On October 30, the Sae-Do-Yak Fund announced that it had purchased long-term delinquent loans held by Korea Asset Management Corporation and the National Happiness Fund. The acquired loans are unsecured personal loans (including those held by individual business owners) that have been in default for over seven years and are valued at 50 million won or less. The total purchase amount is 5.4 trillion won, covering 340,000 individuals.

Upon acquisition by the Sae-Do-Yak Fund, debt collection on these delinquent loans will be immediately suspended. For debts held by socially vulnerable groups, such as basic livelihood security recipients, the fund plans to write them off within the year without a separate repayment ability assessment.

For other loans, a thorough repayment ability assessment will be conducted. If the debtor is found to have lost repayment ability at a level comparable to personal bankruptcy, the debt will be written off within one year. For those with significantly limited repayment ability, debt restructuring will be pursued.

Since last week, Korea Asset Management Corporation and the National Happiness Fund have notified debtors whose loans are eligible for purchase by the Sae-Do-Yak Fund of the planned transfer. From December, once the purchase procedures are completed, debtors will be able to check whether their loans have been purchased, the results of the repayment ability assessment, and whether their loans have been written off through the Sae-Do-Yak Fund’s website.

As the process for major financial sectors such as banks and insurance companies to join the Sae-Do-Yak Fund agreement is proceeding smoothly, the fund plans to actively encourage participation from the private lending sector and mutual finance institutions.

In particular, for the private lending sector, where participation has not yet been active, the fund plans to introduce incentive measures so that private lenders who join the agreement within the year can receive priority benefits.

Meanwhile, a special debt restructuring program for those delinquent for less than seven years and a 500 billion won special loan program for those who have implemented debt restructuring will be launched. Citizens who meet the support requirements, such as being delinquent for less than seven years or having completed debt restructuring, can apply for these programs by making a counseling appointment by phone or via the website and then visiting a nearby Financial Support Center for Low-Income Households.

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