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More Seniors Filing for Bankruptcy

Posted October. 02, 2006 07:02,   


The percentage of those older than 60 who filed for personal bankruptcy, one of systems designed to save indebted individuals, to the court is steadily increasing.

According to the report: “The operation state of personal bankruptcies and personal revival” issued by the bankruptcy division of the Seoul District Court on October 1, the percentage of those older than 60 who filed bankruptcies was 6.3 percent of the total personal bankruptcies applicants in 2004, and then jumped to 9.7 percent in 2005 and has increased to 11.5 percent as of August 2006.

The court said, “The percentage of medical expenses out of the causes of personal bankruptcies was 1.3 percent in 2004, 3.2 percent in 2005 and has jumped more than double to 6.8 percent up until August. This rising percentage is currently showing the same trend with bankruptcy application rise by the aged population.” More and more senior citizens are going bankrupt, as their burden of medical expenses is getting heavier.

Meanwhile, the personal bankruptcy application percentage of those in their twenties has decreased from 12.8 percent in 2004 to 8.5 percent in 2005 and had been steadily going down to 4.9 percent up until August.

It is shown that the total number of those who filed personal bankruptcies has increased substantially.

The number of cases of personal bankruptcies was 27,269 from January to August this year, an increase of 53 percent from last year’s figures, or 17,772. If this trend continues, the number of personal bankruptcies applicants would amount to 44,000 until the end of this year and is expected to jump 2.5 times as much as last year’s figures.

Personal bankruptcies applicants who said that they are in debt due to their spouse reached 64.9 percent of the total and 44.8 percent of them said that more than half of their debt incurred due to their spouse.

However, personal revival cases, 4,910 from January to August in 2006, have decreased 2.0 percent, compared to 5,007 for the same period last year. This resulted from debtors’ preference to personal bankruptcies, which enable them to be free from debts at once thanks to the court immunity.

By gender, males accounted for 60.3 percent of personal revival cases and females made up 54.5 percent of personal bankruptcies.

A court official explained “It seems that males who relatively take more active roles in the economy prefer revival procedures, which allow them to pay debts for five years, to bankruptcies in fear of side effects such as credit damage when they go bankrupt.”

In general, debtors with more education preferred personal revival and less educated debtors chose personal bankruptcies. The amount of debts was less than 100 million won for 74.7 percent of personal revival applicants and 76.3 percent of personal bankruptcy applicants.