To find out if you are eligible to apply for personal rehabilitation for debts that are difficult to handle, [Lawyer Jaeguk Shim's Column]

[Media Fine Current Affairs Column] Although the COVID-19 epidemic is clearly decreasing, the number of people complaining of economic difficulties has increased significantly over the past two years as the economic recession has been prolonged due to COVID-19. All industries, including self-employment, are expressing difficulties due to rising prices due not only to COVID-19 but also to war.

In particular, in the aftermath of a sharp increase in interest rates, borrowers who took out loans at high interest rates are experiencing a vicious cycle of increasing debt due to unbearable interest rates. If you are having difficulty living your daily life due to debt that is difficult to handle, you can consider the ‘personal rehabilitation’ system.

Personal rehabilitation is a system in which the court forcibly reorganizes debts to relieve people suffering from debt. A person who is likely to earn income continuously or repeatedly in the future can be exempted from the remaining debt if he or she repays a certain amount over 3 to 5 years.

If there is a possibility of earning income continuously or repeatedly in the future, you are eligible to apply for personal rehabilitation. After applying for personal rehabilitation, an individual debtor can be exempted from all debt on the remaining principal and interest if he or she repays the amount adjusted by the court within a certain period of time.

If you apply for personal rehabilitation and are approved, collection activities such as visits, phone calls, and text messages from creditors are legally prohibited, so you can escape the threats to your daily life. Since all payment orders can be blocked, the parties involved can continue their daily lives and economic activities.

However, not everyone can apply for personal rehabilitation. You must meet the qualifications to apply for personal rehabilitation, but first, you must have regular monthly income. Regardless of your type of employment, such as daily labor, freelance work, part-time work, or rental work, and whether or not you are enrolled in the four major insurance policies, you must generate income exceeding your living expenses every month.

Debt must be more than 10 million won and less than 2.5 billion won. Also, you must have more debt than all your assets combined. All assets in the name of the debtor, such as real estate, rental deposits, tangible assets, severance pay, bonds, deposits, and insurance cancellation refunds, are considered property, and personal rehabilitation can be applied only if debts exceed these assets.

If you are eligible to apply for personal rehabilitation, you must carefully prepare the documents required by the court. A detailed repayment plan must be prepared, including a list of personal rehabilitation creditors, a list of assets, and a detailed list of the debtor's income and expenses.

If the personal rehabilitation application documents are complicated and the repayment plan is not specific, the progress of personal rehabilitation may be delayed, so it may be necessary to ask for help from a professional lawyer. (Attorney Jae-guk Shim, Daeryun Law Firm)

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