[Asia Economy Reporter Kim Daehyun] The Seoul Rehabilitation Court is expanding the implementation of the 'Rapid Discharge System for Vulnerable Debtors,' which simultaneously dismisses bankruptcy proceedings and grants discharge upon bankruptcy declaration for vulnerable debtors.
According to the court on the 29th, this system, currently implemented in connection with the Credit Recovery Committee, will also be applied from next month to vulnerable debtors linked with the Seoul Welfare Foundation's Seoul Financial Welfare Counseling Center.
Although a discharge decision does not eliminate or reduce the debt itself, it limits the debtor's responsibility, meaning the debtor is only liable within the scope of the assets they had at the time of the bankruptcy declaration.
When the Seoul Financial Welfare Counseling Center submits credit reports and other documents of vulnerable debtors who have applied for personal bankruptcy and discharge, including basic livelihood security recipients, to the court, the court listens to creditors' opinions regarding the discharge and, if there are no special objections, issues a discharge decision simultaneously with the bankruptcy declaration.
As a result, the period from bankruptcy application to discharge, which usually takes 4 to 5 months, is expected to be reduced to within 2 months. Applicants can also save on the cost of appointing a bankruptcy trustee.
Additionally, the court has allowed debtors who are business income earners (self-employed) to submit KCB (Korea Credit Bureau) credit reports or debt statements from financial institutions' websites instead of debt confirmation letters when applying for personal rehabilitation.
This is intended to prevent difficulties in applying for personal rehabilitation caused by the immediate offsetting of self-employed individuals' credit card sales receivables and debts during the process of obtaining debt confirmation letters from credit card companies.
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