The first thing people who are worried about personal rehabilitation due to debt look for is the application qualifications.
I have introduced this personal rehabilitation application qualification in other articles, but today I would like to tell you about the four most key requirements.
There are a few other issues besides this, but once these four requirements are met, most people can see that recovery is possible.
So, if you are looking for qualifications to apply for personal rehabilitation, please be sure to check the information today.
You must have more debt than assets
In the Debtor Rehabilitation Act, the question of who a debtor can apply for rehabilitation is, “A person who has facts that are the cause of bankruptcy or is likely to have such facts.”
The cause of bankruptcy is that you have more debt than assets and you cannot pay off all your debt.
So, to put it simply, a person who cannot or is unlikely to be able to repay all his debts even if he sells all his assets is a debtor who can apply for rehabilitation.
When I say assets here, I mainly refer to things like real estate or cars in my name, business deposits and furniture items, housing rental deposits, deposit or insurance cancellation refunds, stock coin balances, and lastly, 1/2 of severance pay, not retirement pension.
If there is collateral, such as a mortgage, on real estate or a car, the amount collateralized is deducted from the property.
In addition, the first payment for small tenants in a house and the insurance policy loan are deducted from the property and calculated.
In order to apply for personal rehabilitation, the total assets calculated in this way must be less than the debt that is not secured by collateral.
Must have regular income
This is also stated in the law. Usually, people who do personal rehabilitation are largely divided into those who receive a salary and those who run a business. Regardless of whether you receive a salary, run a business, or do something else, you must consistently earn money every month to be able to revive.
And it doesn’t matter if it’s a daily or part-time job rather than a full-time job, as long as it’s consistent.
Also, you don’t have to work at just one job, and it’s okay to make money by working two or three jobs.
However, what you need to be careful about here is that recovery is not complete as long as you make money, no matter how much it is. In principle, you and your family should earn more than the minimum living expenses necessary for living.
In personal rehabilitation, you subtract your living expenses from your income and pay the remaining money to the court every month. Therefore, if your income is less than your living expenses, you cannot raise money to pay the court, so in principle, rehabilitation is not possible.
However, in this case, if you draw up a rehabilitation plan that states that you will spend less than the minimum cost of living stipulated by law and pay money to the court every month, the rehabilitation committee member will pass it, so if you have a low income but still need to be rehabilitated, you can proceed with the case in this way as well. Please remember that.
Secured debt is KRW 1.5 billion or less, unsecured debt is KRW 1 billion or less.
This amount is calculated individually, but if you have more debt than this, personal rehabilitation is not possible and you must go through a much more difficult procedure called general rehabilitation.
Here, secured debt refers to debt secured by things such as liens, pledges, mortgages, and deposits.
Usually, you can think of debts that are mortgaged on real estate or automobiles, or mortgage loan debts that are pledged by a bank.
Unsecured debt can be understood as money borrowed on credit without any such thing.
However, sometimes banks lend money called guaranteed loans.
Some people are confused as to whether this is a secured debt or an unsecured debt, but please remember that this is an unsecured debt because it is guaranteed by a guarantee agency and not secured by your property.
Another thing to note is that the 1 billion to 1.5 billion won that qualifies for personal rehabilitation is not just the principal, but also includes interest and delayed damages.
So, even if the principal is less than 1 billion or 1.5 billion won, if the interest and damages accrued up to that point are added together, it exceeds this amount, then personal rehabilitation is not possible.
And whether the debt exceeds this limit is judged based on the time of submission of the rehabilitation application.
So, if your debt, including principal and interest, is close to this amount, you must quickly submit an application before interest accrues so that it does not exceed this amount. If it has already exceeded this amount, you must pay off part of the debt to bring it down to this amount or less and apply for rehabilitation. do.
Available only after 5 years since the last exemption
There is no limit to the number of rehabilitation bankruptcy cases, so in principle, even if you have been discharged before, you can do it again.
Instead, there is a time limit, so if you have received an exemption decision due to rehabilitation bankruptcy in the past, you can only apply again after 5 years from then.
If you apply before then, your rehabilitation will be rejected.
What you should not be confused about here is that it is 5 years after receiving the exemption, so if you previously applied for rehabilitation and it was approved, but it was abolished due to failure to pay the repayment, you have not been exempted, so you can apply right away without this period limit.
So, those who apply for rehabilitation again must check whether they were accurately exempted from the previous case and, if so, when the exemption was confirmed to avoid the case being dismissed.
Today, I told you about four representative personal rehabilitation application qualifications. In addition to this, there are several other requirements for the rehabilitation to pass successfully.
However, if these four requirements are properly met, it can be said that personal rehabilitation is possible in almost 90% of cases, so you do not need to worry too much about other aspects. Please also check out the related video.