[Exclusive] Individual Rehabilitation and Bankruptcy Support Centers to Open in Incheon, Uijeongbu, and Changwon This Year

Change in Lottery Fund Operation Plan by the Ministry of Economy and Finance
Two More Centers to Be Established This Year, Starting with Incheon
First New Center Construction in 11 Years
Centers to Be Set Up in All Regions with Rehabilitation Courts in the Future

The Individual Rehabilitation and Bankruptcy Comprehensive Support Center (the Center) of the Korea Legal Aid Corporation, which provides free legal aid and other services to financially vulnerable individuals facing excessive debt and difficulty in economic recovery, will be newly established not only in Incheon this month but also in Uijeongbu, Gyeonggi Province, and Changwon, South Gyeongsang Province, this year. In the future, the Center is expected to be set up in all regions where rehabilitation courts are located, making it easier for vulnerable individuals to receive support after visiting the court.

On July 2, the National Assembly's Strategy and Finance Committee held a plenary meeting and approved the government's proposal for the supplementary budget and the revised fund operation plan under the Ministry of Economy and Finance. The revised plan for the Center's project within the Lottery Fund operation plan was included in this approval. Specifically, an additional 2.57 billion won was allocated to the 1.285 billion won budget for the Incheon Center, which is scheduled for completion this month. Through this increase, the Ministry of Economy and Finance decided to newly establish centers in Uijeongbu and Changwon. Both centers aim to complete construction within this year and open in December. The construction of the Uijeongbu and Changwon centers had already been planned during last year's Lottery Fund operation plan. However, during the Ministry's review process, the budget was adjusted, and only the budget for the new Incheon center was allocated at that time.

The reason for establishing centers in Uijeongbu and Changwon is that, among the regions with rehabilitation courts, these areas have the largest populations under their jurisdiction and the highest numbers of individual rehabilitation and bankruptcy cases after Incheon, where a center is currently being built. As of last year, the Incheon Rehabilitation Court handled 15,871 cases, Uijeongbu 11,369 cases, and Changwon 4,919 cases. Incheon had more cases than Daegu (15,304 cases), where a center is already established, and Uijeongbu also had more cases than Gwangju (7,962 cases) and Ulsan (4,276 cases), both of which have centers.

This year marks the first time in 11 years that a new center is being built. Since the first center was established in Seoul in 2009, centers have been opened in seven regions (Seoul, Daegu, Busan, Gwangju, Daejeon, Suwon, and Ulsan) by 2014. The Ministry of Economy and Finance plans to build centers in all 14 regions with rehabilitation courts. The regions where centers have not yet been established are Chuncheon in Gangwon Province, Cheongju in North Chungcheong Province, Jeonju in North Jeolla Province, and Jeju.

The Center provides services such as free legal aid including attorney representation and litigation cost support, education on individual rehabilitation and bankruptcy discharge procedures, individual debt adjustment, employment support, and financial planning to low-income and low-credit individuals who are unable to recover due to excessive debt, such as multiple debtors, victims of illegal private lending, small business owners, and victims of jeonse fraud. Although the Korea Legal Aid Corporation, under the Ministry of Justice, operates the Center, the budget for building the centers comes from the Lottery Fund, which is financed by lottery business revenues as part of its public interest projects.

With the recent surge in individual rehabilitation and bankruptcy cases, as well as jeonse fraud, the National Assembly expects that the establishment of the Center will increase support for financially vulnerable groups. According to the Jeonse Fraud Victim Support Committee and the Korea Legal Aid Corporation, the number of confirmed jeonse fraud victims was 10,256 in 2023 and 15,322 last year. Legal consultations and legal aid cases numbered 3,807 and 814, respectively, in 2023, and 4,932 and 1,355 last year. The number of individual rehabilitation and bankruptcy cases also rose significantly, from 130,113 and 19,533 at the courts and the Corporation, respectively, in 2021, to 169,602 and 23,480 last year. In its preliminary review report, the Strategy and Finance Committee of the National Assembly stated, "With the recent increase in the total amount of debt and delinquency rates across society, and the rise in jeonse fraud cases, support projects for these financially vulnerable groups appear to be necessary."