The revision of the enforcement decree, which changes the calculation method for the upper limit of protected assets for the debtor's minimum livelihood maintenance during personal rehabilitation and bankruptcy processes from a fixed amount to a fixed ratio, has passed the Cabinet meeting.
On the 4th, the Ministry of Justice announced that the revision of the "Enforcement Decree of the Debtor Rehabilitation and Bankruptcy Act" (hereinafter referred to as the Debtor Rehabilitation Act Enforcement Decree), aimed at guaranteeing a minimum livelihood in line with the price level, has passed the Cabinet meeting and is scheduled to be implemented.
The current Debtor Rehabilitation Act Enforcement Decree, revised in 2019, set the upper limit of protected asset amounts in rehabilitation and bankruptcy at 11.1 million KRW (based on 40% of the median income of a four-person household for six months at that time).
The revision sets the upper limit amount as "40% of the median income of a four-person household according to Article 2, Item 11 of the National Basic Livelihood Security Act, multiplied by 6 (based on the time of rehabilitation or bankruptcy declaration)," thereby reflecting the price level at the time of rehabilitation or bankruptcy. According to the revised decree, the exemption limit for six months of living expenses this year is set at 13.75 million KRW.
The Ministry of Justice stated, "With this revision, the amount of assets protected during personal rehabilitation and bankruptcy procedures will be reasonably calculated, which is expected to help the debtor maintain a minimum livelihood and achieve economic recovery."
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