[The Power Reporter Minjin] There are many people who are experiencing economic difficulties due to the recent increase in interest rates and rising prices, and many of them are not just finding it difficult to live compared to before, but are even finding it difficult to maintain basic livelihood.
If you find it difficult to cover the interest and principal due on your debt even though you are engaged in economic activities, you can apply for debt adjustment through the personal rehabilitation procedure. Personal rehabilitation is a rehabilitation system that helps individual debtors who are at risk of bankruptcy due to financial difficulties to generate stable and continuous income in the future.
A debtor whose personal rehabilitation application has been accepted can have the remaining debt forgiven if he or she continues to repay part of the debt for 3-5 years with the remaining amount of his or her income, excluding living expenses.
In addition, debtors who have received personal rehabilitation can stop and prohibit compulsory execution by creditors, such as seizure, provisional seizure, and demand, and can also open bank accounts and use check cards. In addition, your family, including your spouse and children, will not be disadvantaged due to your debt.
As much as the benefits are great, not everyone can apply for personal rehabilitation. It is limited to those who are likely to continuously receive a fixed and certain income as a salary earner or business income earner, the total amount of debt is less than KRW 1 billion in the case of unsecured debt and KRW 1.5 billion in the case of secured debt, and are in a state of insolvency (where there are more debts than assets).
The application process is also difficult, requiring the preparation of specific and diverse documents, such as a list of personal rehabilitation creditors and asset lists, a detailed list of the debtor's income and expenditures, data proving salary earners and business income earners, and preparation of a detailed repayment plan.
Another thing to be aware of is that even if personal rehabilitation is approved, the exemption decision may be canceled if the high repayment amount cannot be met. Therefore, a clear and realistic plan must be established on how to repay the amount when approved.
Attorney Park Young-gyu of Daeryun Law Firm (Limited) advised, “As there are many documents that must be prepared for personal rehabilitation and bankruptcy-related issues and thorough preparations such as drawing up a feasible repayment plan are required, it is advisable to seek legal assistance from a lawyer specializing in insolvency and proceed carefully.”
View full article - Personal rehabilitation following bankruptcy, procedures must be carried out carefully
