Personal Debt Adjustment Expected to Reach Record High of 180,000 Cases... Corporate Bankruptcies Already at All-Time High

The number of borrowers who have defaulted on their debts and entered debt adjustment is expected to reach an all-time high this year. The number of corporate bankruptcies has already surpassed last year's total, setting a new record.

Debt Adjustment Application. Yonhap News

According to data received from the Credit Recovery Committee by Lee Jung-moon, a member of the National Assembly's Political Affairs Committee from the Democratic Party of Korea, the number of debt adjustment applications to the Credit Recovery Committee was counted at 179,310 as of the end of November.

Debt adjustment is a system that provides extended repayment periods, interest rate adjustments, and debt reductions for borrowers who find it difficult to repay their debts due to financial hardship. When including December figures, it is expected to exceed last year's total number of debt adjustment applicants (184,867 cases).

In particular, the number of self-employed individuals applying for debt adjustment reached 26,267 by November, already surpassing last year's record (25,024 cases). Individual debt adjustment applications totaled 152,953, which is 95.7% of last year's figure (159,843 cases).

With prolonged high inflation, high interest rates, and high exchange rates, and domestic demand suffering, corporate bankruptcies have already reached an all-time high this year. According to the Court Statistics Monthly Report, the number of corporate bankruptcy cases filed at courts nationwide from January to November this year was 1,745, exceeding last year's total of 1,657 cases, which was the previous record.

The number of corporate bankruptcy rulings (approved cases) also increased by about 16.3% to 1,514 cases compared to last year's total of 1,302 cases, marking a record high.

The number of personal rehabilitation applications also approached last year's record total of 120,117 cases, reaching 119,508 cases as of November this year.

According to the Financial Supervisory Service, as of the end of October, the delinquency rate for small and medium-sized corporations' won-denominated loans at domestic banks was 0.74%, up 0.15 percentage points from 0.59% in the same month last year, and the delinquency rate for individual business owners was 0.65%, up 0.14 percentage points from 0.51% in the same month last year.

Assemblyman Lee Jung-moon emphasized, "The government must take proactive support measures to protect low-credit or low-income groups who find it difficult to use formal financial institutions," and added, "An additional budget is essential to ensure the stable supply of policy finance for ordinary citizens."