SEOUL, July 11 (Yonhap) — The government will launch a debt restructuring scheme for individuals in October as part of efforts to reduce or ease their payment burdens, the country’s financial regulator said Friday.
The so-called bad bank, a debt restructuring vehicle, will be sized at 800 billion won (US$581 million), around half of which will be funded by banks and other financial institutions. The rest will be made up for by the government.
The bad bank will take over or restructure parts of debts owed by individuals struggling with payments, according to the Financial Services Commission (FSC).
The FSC said it will map out measures to deter moral hazard among borrowers.
Under the measures, a part of bad loans will be taken over by the bad bank or borrowers will be given options to repay debts flexibly.
The regulator estimated the debt restructuring scheme will help resolve some 16.4 trillion won in soured loans whose repayments have been overdue for years by 1.13 million borrowers.
This April 13, 2025, file photo shows a supermarket in Seoul. (Yonhap)
sam@yna.co.kr
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