Debtors who have earned less than the minimum wage over the past two years and meet certain other conditions will be able to shorten their repayment period to less than three years when entering individual rehabilitation proceedings.
The Seoul Rehabilitation Court said on the 1st that it had revised its practice guidelines to include vulnerable debtors among those eligible for a shortened repayment period under individual rehabilitation. The change took effect the same day.
Under the revision, debtors who have been paid below the minimum wage for the past two years can have their repayment period cut to less than three years if they also have total debt of 50 million won or less, no individual creditors and no new borrowing over the past year. That shortens the period for paying off debt and allows the remaining balance to be forgiven.
Previously, when a debtor was unable to repay the full principal, the shortened repayment period applied to people aged 65 and over, people with severe disabilities, young adults under 30, those raising two or more minor children, single parents and victims of jeonse (a lump-sum deposit lease) fraud.
