Number of debt workout scheme applicants expected to hit record high in 2024

An application for the state-managed debt workout program / Yonhap The number of people newly seeking assistance through a debt workout program is expected to reach an all-time high this year, government data showed Sunday, amid the prolonged economic slowdown. Under the state-managed bailout scheme, the Credit Counseling and Recovery Service (CCRS) collaborates with financial companies to provide individuals on the brink of insolvency a second chance by restructuring their credit obligations and writing off debt when necessary. A total of 179,310 people applied for the program as of the end of November, according to data provided by the CCRS and submitted to Rep.

Lee Jeong-moo of the main opposition Democratic Party of Korea. The annual figure is projected to surpass last year's record high of 184,867 applicants. Notably, the number of self-employed individuals, mostly those running small businesses, seeking to join the program reached 26,267 as of end-November, already exceeding last year's record of 25,024.



The surge is attributed to ongoing economic challenges, including high inflation and high interest rates, coupled with slower-than-expected domestic demand. Additionally, corporate bankruptcies have also hit record levels this year. According to separate data provided by court authorities, the number of corporate bankruptcy cases filed with courts came to 1,745 in the January-November period, surpassing the record high of 1,657 set in 2023.

The number of corporate bankruptcy rulings also rose significantly, with 1,514 cases recorded so far this year, up 16.3 percent from last year's total of 1,302 cases. (Yonhap).