The 'New Leap Fund' has eliminated 628.6 billion won in long-term debts of vulnerable social groups, with over 55% of those debts being overdue for more than 15 years.
The New Leap Fund, a bad bank aimed at writing off long-term debts, has announced that it has eliminated 628.6 billion won in overdue debts affecting vulnerable groups, with 55.2% of these debts being outstanding for more than 15 years. This indicates a significant number of debtors who have lost their ability to repay and have remained trapped under the burden of debt for extended periods.
Conducted by the Financial Services Commission, the second round of debt cancellations included low-income beneficiaries, individuals with severe disabilities, and war veterans, where the ability to repay was waived from consideration. The canceled debts consist primarily of loans with no remaining principal due to interest and fees, debts linked to deceased borrowers, and debts whose statute of limitations has expired. Most of the debts slated for cancellation were for amounts under 10 million won, highlighting the financial struggles faced by many in the lower income bracket.
The demographic of the debtors shows a high percentage of elderly individuals, with those in their 60s making up 38.2% of the total. The Financial Services Commission plans to continue these cancellation efforts on a quarterly basis, aiming to alleviate the financial burdens on vulnerable groups by forgiving long-standing debts, thereby providing them a chance for financial recovery and a fresh start without overwhelming debt responsibilities.
