개인채무조정제도의 평가와 정책적 시사점 (Evaluation and Policy Implications of Personal Loan Modification Programs in Korea)

KDI Policy Study 2014-09, 1-90

109 Pages Posted: 13 Jun 2016

See all articles by Yoon Hae Oh

Yoon Hae Oh

Korea Development Institute (KDI)

Date Written: December 31, 2014

Abstract

Korean Abstract: 본 연구는 개인회생제도의 신청자가 급증하는 현상에 대응하여 정책적 시사점을 도출하고자, 채무자가 구제제도를 선택하는 데 영향을 미치는 결정요인을 분석한다. 또한 채무조정제도인 법원의 개인회생과 신용회복위원회의 개인워크아웃 이용자의 표본자료를 분석하여, 제도의 특성 및 채무조정 성공의 결정요인을 비교한다. 본문의 구체적인 분석 결과와 시사점은 다음과 같이 요약될 수 있다. (이하 생략)

English Abstract: This study attempts to derive policy implications in response to the acute increase in applicants for the reconstructive personal bankruptcy (Chapter 13 style). Thus, this study analyzes the determinants of debtors’ choice among various debt relief programs. This study also compares the characteristics of two programs, the reconstructive personal bankruptcy by the Court and the private debt modification program by the CCRS (Credit Counseling and Recovery Service). Main findings and implications of this study can be summarized as follows.

Firstly, analyzing the regionally aggregated data, we found out that the increase in the amount of household debt and the portion of high interest loans induced the recent increase in the number of applicants for the reconstructive personal bankruptcy. Moreover, we investigated the sample of debtors in Seoul who used the reconstructive personal bankruptcy and the private debt modification by the CCRS. We found out that the debt structure of an average debtor became more vulnerable in the period between 2012 and 2013, with the increases in the amount of total debt, in the portion of high interest loans, and in the number of creditors. Accordingly, we emphasize the necessity to enlarge the preemptive credit counseling for the over-indebted so that they could switch their consumption habits and debt structure.

Secondly, with the analysis of regionally aggregated data, we also found out that past rulings and attitude of the Court affect the choice of debtors. The nationwide declination in the number of applicants for liquidating personal bankruptcy (Chapter 7 style) can be explained by the strict procedure of the Court in Chapter 7 since 2007. And the regional variety in the ratio of applicants between Chapter 13 and the debt management by CCRS can be explained by the Courts’ acceptance rate of Chapter 13. Thus, abusive use of the reconstructive personal bankruptcy could be restrained if the Court reinforces its screening process.

Lastly, this study shows that the average reimbursement rates are similar between the reconstructive personal bankruptcy and the personal debt management by CCRS, and thus low-cost private debt management program could be more beneficial to debtors in some cases. Therefore, debtors should bear in mind that their legal agents might try to induce them to the Court for legal fee incentive. On the other hand, this study also demonstrates that the probability of failure with debt management by CCRS becomes larger for debtors in the category of a high debt-to-income ratio, the self-employed and older people. Thus, when the CCRS considers the probability of failure is high for some applicants, the CCRS should refer them to the Court and this will help increase the efficiency of debt modification procedure.

In addition, this study also introduces an existing discussion about the improvement plan of the debtor recovery system and suggests some proposals.

Suggested Citation

Oh, Yoon Hae, 개인채무조정제도의 평가와 정책적 시사점 (Evaluation and Policy Implications of Personal Loan Modification Programs in Korea) (December 31, 2014). KDI Policy Study 2014-09, 1-90, Available at SSRN: https://ssrn.com/abstract=2792455

Yoon Hae Oh (Contact Author)

Korea Development Institute (KDI) ( email )

263 Namsejong-ro
Sejong-si 30149
Korea, Republic of (South Korea)

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
86
Abstract Views
634
Rank
527,956
PlumX Metrics