More Businesses and Individuals Struggle to Repay Debts...Corporate Bankruptcy Filings 2.4 Times as High in Four Years

[Financial News] As the economic downturn drags on, the number of businesses and individuals turning to the courts because they cannot manage their debts has risen sharply. Corporate bankruptcy filings have grown to 2.4 times their level four years ago, while applications for personal debt rehabilitation and real estate auctions have also increased significantly.
On the 17th, an analysis of Judicial Yearbook data by the office of Rep. Park Ji-won of the Democratic Party of Korea, a member of the National Assembly’s Legislation and Judiciary Committee, found that courts received about 2,282 corporate bankruptcy filings last year, up 138.9% from four years earlier.
Corporate bankruptcy filings rose every year, from 1,004 in 2022 to 1,657 in 2023 and 1,940 in 2024. Over the same period, rehabilitation agreement cases, which mainly include corporate rehabilitation proceedings, also increased 84%, from 717 to 1,321. In other words, filings for bankruptcy grew faster than cases pursuing rehabilitation procedures to restore companies to normal operations.
The burden of household debt has also grown. Applications for personal debt rehabilitation increased 84.1%, from 81,030 in 2021 to 149,147 last year. Personal debt rehabilitation is a system under which debtors with regular income repay part of their debts in installments, generally over three years and for up to five years.
By contrast, personal bankruptcy applications, filed by people without income who have difficulty repaying their debts, totaled 40,909 last year. Applications for personal bankruptcy have remained in the 40,000s each year over the past five years.
Applications for real estate auctions also increased. The number rose 59.9%, from 62,116 in 2021 to 99,296 last year.
Rep. Park said, “These court statistics starkly show the realities facing businesses and households, making them statistics on people’s livelihoods. Courts should handle matters directly affecting the lives of ordinary people and small business owners, such as personal debt rehabilitation, bankruptcy and auctions, even more fairly and swiftly, and thereby contribute to people’s livelihoods.”

[email protected] Kim Hyun-ji Reporter