Decision Made at Small Business Owners' On-Site Discussion
Presided Over by Financial Services Commission Secretary General Kwon Daeyoung
Issue Raised at President Lee Jaemyung's Town Hall Meeting Addressed Promptly
The government will shorten the period during which financial companies can share personal rehabilitation information of small business owners from a maximum of five years to one year.
According to the financial sector on July 8, the Financial Services Commission, led by Secretary General Kwon Daeyoung, held an on-site discussion to address financial difficulties faced by small business owners and made this decision. Specifically, if an individual undergoing court personal rehabilitation procedures faithfully repays their debts, the related information will be deleted early.
This issue was raised at the Chungcheong Region Town Hall Meeting presided over by President Lee Jaemyung on July 4. For small business owners undergoing rehabilitation or bankruptcy procedures in court, or those in the process of debt adjustment, public information indicating ongoing debt adjustment is shared with financial companies through the Korea Credit Information Services for up to five years. If such information remains at the Korea Credit Information Services, it becomes difficult for individuals not only to obtain new loans but also to conduct everyday and essential financial activities, such as using credit cards.
Kwon Daeyoung, Secretary General of the Financial Services Commission, on the afternoon of the 8th at the Credit Recovery Committee held at the Korea Press Center in Jung-gu, Seoul, listened to the voices from the field as the first measure to resolve financial difficulties of small business owners raised at the President's Chungcheong Region Town Hall Meeting. This was the first on-site discussion to address financial difficulties of small business owners, hearing from policy users and related experts. Financial Services Commission
At the discussion, it was pointed out that excessively long periods of public information registration and sharing could lead to a recurrence of financial distress among small business owners. Furthermore, there was an opinion that the original purpose of the debt adjustment system?to support a fresh start?could be undermined as the possibility of rehabilitation decreases. The issue of fairness with other debt adjustment systems was also raised. For example, in the cases of Individual Workout and the Saechulbal Fund, if debts are faithfully repaid for one year, public information is deleted early.
The Financial Services Commission announced that, after discussions at the Credit Information Concentration Management Committee (the council of credit information sharing agreement institutions), it would revise the "General Credit Information Management Regulations" to provide a basis for early deletion of public information for court rehabilitation procedures as well, if the debtor has faithfully performed the repayment plan for more than one year.
Even before the regulatory revision, the Commission plans to discuss with the courts the retroactive application of this measure to those who have already received a court rehabilitation decision. However, in the case of bankruptcy discharge, unlike rehabilitation, it is a complete release from liability for those unable to repay, which may differ legally and economically. Therefore, it was agreed that a more cautious review, including gathering additional expert opinions, is necessary.
The Financial Services Commission stated, "We plan to design and operate a financial support policy for the recovery of small business owners that fully reflects on-site opinions, so that small business owners, who are the backbone of our economy, do not have their lives derailed by a single economic failure."
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