Seoul Financial Welfare Counseling Center and Small Enterprise Market Promotion Corporation Begin Collaboration on 'Restart Legal Support Project'
[Asia Economy Reporter Lim Cheol-young] The Seoul Metropolitan Government is launching free legal support to help small business owners who have closed their businesses or are considering closure due to overwhelming debt accumulated from the prolonged COVID-19 pandemic to get back on their feet.
On the 22nd, the Seoul Financial Welfare Counseling Center of the Seoul Welfare Foundation announced that following the launch of the 'ReStart Legal Support Project' in September last year, which assists financially vulnerable groups with debt adjustment, it will begin close counseling and support for small business owners in cooperation with the Small Enterprise and Market Service starting on the 26th. The 'ReStart Legal Support Project' expands support channels by operating the 'ReStart Legal Support Group,' composed of private lawyers recommended by the Korea Bankruptcy and Rehabilitation Lawyers Association, through the center.
Since September last year, private lawyers from the 'ReStart Legal Support Group' have been representing debtors who have undergone debt counseling at the center in applying for and filing public debt adjustments such as personal bankruptcy, discharge, and individual rehabilitation. In addition to legal support, tailored welfare services such as job placement, housing, and financial counseling are also provided concurrently.
The center manages and operates the 'ReStart Legal Support Group,' while the Small Enterprise and Market Service supports legal costs such as lawyer fees. After several consultations between Seoul and Daejeon due to the prolonged COVID-19 crisis, the two organizations signed a memorandum of understanding. They plan to conduct a pilot program until the end of the year and decide on expansion based on the results.
With the prolonged COVID-19 pandemic, not only low-income groups but also the middle class face rapid collapse risks, increasing demand for public debt adjustment applications such as personal bankruptcy and individual rehabilitation. Small business owners with regular business income can apply for individual rehabilitation instead of personal bankruptcy, but the preparation process is complicated, and public support systems are insufficient.
Applications for counseling can be made online through the Small Enterprise and Market Service website (hope.sbiz.or.kr). When cases submitted online to the Small Enterprise and Market Service are linked to the center, the center proposes the most suitable debt adjustment plan based on the applicant's debt situation through counseling. In urgent cases involving collection or demands from loan companies, a debtor representative (lawyer) is provided, and for personal bankruptcy, discharge, and individual rehabilitation, lawyers from the 'ReStart Legal Support Group' represent applicants and file cases with the Seoul Rehabilitation Court. Lawyer fees are free of charge.
In addition to legal support, the center provides ongoing financial counseling such as income and expenditure management and post-management through linking welfare services like medical care and job placement to prevent financially vulnerable groups from falling back into debt crises. It also connects with the Small Enterprise and Market Service’s recovery support programs such as the Hope Return Package.
Park Jeong-man, head of the Seoul Financial Welfare Counseling Center (lawyer), said, "There is no distinction between central and local governments in rescuing small business owners trapped in the quagmire of malignant debt due to the COVID-19 crisis," adding, "We will do our best to cooperate so that small business owners in crisis can hold on to the hopeful dream of 'ReStart.'"
Jo Bong-hwan, president of the Small Enterprise and Market Service, said, "The ReStart Legal Support Project is a robust support system that helps small business owners in difficulty to stabilize and make a fresh start," and added, "The Service will continue to actively support the recovery of closed small business owners and cheer on their 'ReStart.'"
Meanwhile, the center provides financial welfare services to Seoul citizens suffering from malignant debt, including public debt adjustment support (personal bankruptcy, individual rehabilitation) for managing the scale of malignant debt, public financial counseling and financial education, and linking welfare services such as housing and job placement for recovery support.
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