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Insolvency lawyer, "Strengthening the cryptocurrency personal rehabilitation bankruptcy litigation structure... Early response is important."

Media Outlet daily

2021-07-30

도산전문변호사, "암호화폐 개인회생파산소송구조 강화... 초기대응 중요"

As the cryptocurrency market has recently shown a sharp decline and market anxiety is growing, there are warning signs that individual investors who have jumped into cryptocurrency investment (debt investment) are putting themselves at risk. The legal community advises that individual investors who face bankruptcy through so-called ‘leverage investment’, which involves borrowing money to buy cryptocurrency, can consider a personal rehabilitation system.

Shim Jae-guk, an insolvency lawyer (Daeryun Law Firm), said, “If an individual debtor facing bankruptcy has a certain amount of income in the future, he or she may be able to utilize the personal rehabilitation system that allows the remaining debt to be exempted by repaying a certain amount over a set period of time.” However, there is a recent case in which the court dismissed the application, believing that it was an abuse of the personal rehabilitation process when the debt was significantly increased through cryptocurrency investment, which appeared to be a speculative activity. Regarding this, he explained, “The court ruled that speculative debt can be considered ‘moral hazard’ as a result of abuse of the personal rehabilitation system, so even if it is a system with no limit on debt, if the application is not sincere, it can be dismissed.”

He pointed out that investing in cryptocurrency is different from gambling or speculation, and it is not difficult to find advertisements saying that it is possible to apply for rehabilitation, so caution is needed. Attorney Shim said, "The court may not accept the rehabilitation application because the application is not sincere. If the reason for the rehabilitation application is excessive debt due to highly speculative investments, it may be helpful to seek quick legal assistance through legal counseling first."

Jaeguk Shim, an insolvency lawyer, said, “Even if the debt is speculative, the debt situation may be different for each individual, such as the degree of the debt and the circumstances of the investment. If there is sufficient persuasion from the court, there is a possibility of receiving a decision to approve personal rehabilitation.” He added, “In particular, when applying for personal rehabilitation bankruptcy due to cryptocurrency or stock investment debt, the court will strictly look at the repayment plan, so meticulous and thorough preparation of application documents will be necessary.”

He also said, “If you are an individual debtor with debts of more than 10 million won, unsecured debts of 1 billion won, and secured debts of 1.5 billion won or less and have a certain income, it will be advantageous to apply for rehabilitation. If your debts exceed a total of 2.5 billion won or your income is below the minimum cost of living, it will be advantageous to file for bankruptcy.” However, if an individual is in a situation where he or she has excessive debt, the advantageous debt adjustment system may be different, and as the number of applicants for rehabilitation bankruptcy has increased, the court has emphasized legal assistance by judging application documents and materials strictly.

Daeryun Law Firm, which provided assistance, provides legal advice on rehabilitation and bankruptcy. Currently, we have offices all over the country, including Seoul, Busan, Daegu, Incheon, Gwangju, Daejeon, Ulsan, Suwon, Changwon, Cheongju, Jeonju, Uijeongbu, Chuncheon, Jinju, and Jeju.

View original article - https://n.news.naver.com/article/119/0002497878

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