Financial Authorities: "Bad Bank to Be Established in August, Debt Purchases Begin in October"

Kwon Daeyoung, Secretary General of the Financial Services Commission (third from the right in the top row), attended an expert meeting on the morning of the 11th at the Government Seoul Office in Jongno-gu, Seoul, to review the long-term delinquent debt adjustment program. Along with Yang Hyuksung, Chairman of the Long-term Small Delinquent Debtors Support Foundation, Jung Eunjeong, Director of the Financial Welfare Center at the Seoul Welfare Foundation, lawyer Lee Jiyeon, representatives from the Korea Asset Management Corporation, the Korea Federation of Banks, and other related organizations, they reviewed the schedule and promotional plans for the long-term delinquent debt adjustment program. They also discussed cooperation matters by each institution and future policy directions. Photo by Financial Services Commission.

The "Long-term Delinquent Debt Adjustment Program (Bad Bank)," which will collectively purchase and extinguish long-term delinquent debts of 50 million won or less that have been overdue for more than seven years, is scheduled to be established next month and begin purchasing delinquent debts around October.

On July 11, the Financial Services Commission held an expert meeting chaired by Secretary General Kwon Daeyoung to review the long-term delinquent debt adjustment program, announcing, "We will announce the detailed plan for the long-term delinquent debt adjustment program as quickly as possible within the third quarter."

The Financial Services Commission emphasized that as soon as the debt adjustment institution purchases delinquent debts, collection activities will be halted, allowing citizens to be free from the pain of debt collection.

The Korea Asset Management Corporation (KAMCO), which is in charge of operating the program, stated that it will establish practical measures to minimize concerns related to the possibility of immoral debt relief, such as for entertainment business debts, and excessive support for foreigners.

Of the 800 billion won required for the debt adjustment institution, 400 billion won will be jointly raised by the first and second-tier financial sectors.

Kwon Daeyoung, Secretary General, stressed, "Only the debts of those who are truly in severe hardship, with no repayment ability at a level equivalent to bankruptcy, will be extinguished after a thorough review of repayment capacity based on credible information."