Korean household debt climbed to over 1 quadrillion won (US$922 billion) in December 2013, and individuals with defaults on liabilities and bad credit rose to the highest level in four years.
According to the Credit Consulting and Recovery Service and financial circles on February 3, individuals entering bankruptcies plan for loans defaulted over 3 months increased to 77,481, and those entering pre-bankruptcy plans totaled 19,658, altogether adding up to be 97,139.
This represents a 7.8 percent increase from 2013, and is the highest since 2009, when the total number was 101,714.
Since October 2002, those who applied for credit recovery plans totaled 1,237,638. This excludes those that have supposedly completed a bankruptcy plan designed by the government, which is estimated at about 300,000.
A financial industry-related source said, “Generally, it takes 8 to 10 years to complete a bankruptcy plan, and there are cases that take 20 years to complete.” Then he added, “In actuality, the total number of individuals with bad credit should be 940,000, if you take into account that figure.”