FSC Holds Task Force Meeting
to Review Implementation Status
of the Personal Debtor Protection Act
Since the Personal Debtor Protection Act was enacted last October, financial companies that received the right to request debt adjustment have conducted approximately 45,000 cases of self-initiated debt adjustments.
The Financial Services Commission (FSC) announced that it held a meeting of the Personal Debtor Protection Act Implementation Monitoring Task Force chaired by Vice Chairman Kim So-young on the 9th. After reviewing the operation status of the system since the enactment of the Personal Debtor Protection Act, the FSC evaluated that although new systems such as the right to request debt adjustment are still in the early stages of implementation, they are relatively stably settling in the financial sector.
Regarding the right to request debt adjustment, it was identified that financial companies conducted a total of 44,900 cases of self-initiated debt adjustments by financial companies as of the 14th of last month since the law’s enforcement. Principal and interest reductions accounted for the largest portion with 26,440 cases (33%), followed by extension of repayment periods (19,564 cases, 25%) and installment repayments (12,999 cases, 16%). In cases of disasters or accidents, the debt collection suspension system, which allows for a grace period on debt collection, was utilized in a total of 9,079 cases.
The system restricting types of debt collection contacts, which allows debtors to request no debt collection during certain times or by certain means to protect their daily lives, was utilized in a total of 32,357 cases.
The FSC stated that the six-month grace period, which was granted twice after the enactment of the Personal Debtor Protection Act, is scheduled to end on the 16th as originally planned.
Vice Chairman Kim So-young of the FSC emphasized, "The Personal Debtor Protection Act is significant in that it systematically regulates the entire process that debtors experience after loan delinquency," adding, "While benchmarking legislative cases from advanced countries such as the United States and the United Kingdom, this system has established the minimum necessary measures to protect debtors by reflecting the conditions of our financial market."
Vice Chairman Kim added, "Recently, uncertainties surrounding our economy have increased due to sluggish domestic demand and signs of protectionism. Since the economically vulnerable and low-income groups are most affected during economic difficulties, the Personal Debtor Protection Act will play an even more important role as a system that alleviates excessive debt burdens on debtors and supports their economic recovery."
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