Individual Bankrupts Reach 473 in First Half of This Year

The number of individual bankrupts pronounced by the Seoul Court in the first half of this year went over four times from a year ago due to the economic downturn and reckless use of credit cards. With bankruptcy applicants growing 2.5 times from a year ago, individual bankruptcy, dubbed ‘a death sentence in credit societies,’ is becoming more serious.

Individual bankrupts reached 473 in the first half of this year, 4.4 times that of a year ago, according to the Seoul Court on July 23. Bankruptcy applicants in the same period jumped to 469 from 184 and exemption applicants surged to 349 from 73, 4.7 times from a year ago. The application of individual bankruptcy around the nation swelled to 339 in 2000, 672 in 2001, and more than 1,000 cases in 2002.

The soaring individual bankrupts are attributed to the decreased individual profits due to the prolonged economic slowdown, the reckless issue of credit cards by card companies, and the excessive spending of debtors despite the reduced limit of their credit cards, according to the court.

“The annual number of individual bankrupts reaches 100,000 in Japan and 1 million in the U.S., apart from the individual turnaround system. However, most of them are exempted,” said Yoon Kang-yeol, a judge in the Seoul Court. “The number will pass the annual 10,000 mark in the nation within 2-3 years,” he predicted.

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When the court pronounces bankruptcy, this is printed in the identification certificate. Bankrupts are disadvantaged in their daily lives such as employment and transactions with financial institutions. In addition, even if they were exempted from debts, they may be restricted in financial transactions due to the fact that remains in their credit information.

Although the current bankruptcy law excludes the debts due to extravagance, gambling and hiding assets from exemption, the court can make a decision at its discretion.

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