Personal Rehabilitation in Korea 2026: Eligibility, Income Rules, and Repayment Plans

What Is Personal Rehabilitation?

Many people confuse personal rehabilitation (개인회생) with personal bankruptcy (개인파산). Personal rehabilitation is a legal process in which an individual with excessive debt applies to the court, commits to a repayment plan over a set period, and receives discharge of any remaining debt upon completion. It is similar to Chapter 13 bankruptcy in the United States and is governed by Korea's Debtor Rehabilitation and Bankruptcy Act, enacted in 2004.

Eligibility Requirements

Debt Limits

• Secured debt: 1 billion KRW or less
• Unsecured debt: 500 million KRW or less

These limits were updated as of 2024, reflecting an increase from the previous thresholds.

Regular Income Requirement

Both salaried workers, self-employed individuals, and freelancers are eligible. The key requirement is demonstrating a stable ability to make payments throughout the repayment plan period — even if your income is irregular.

Personal Rehabilitation vs. Bankruptcy

If you want to keep your home or major assets while resolving debt, personal rehabilitation is generally the better path.

Calculating Your Repayable Amount

Your monthly repayment is calculated as your monthly income minus the minimum living cost set by the court.

• 2026 minimum living costs: Approximately 1,500,000 KRW for a 1-person household; approximately 3,000,000 KRW for a 4-person household

Example: A single-person household with a monthly income of 2,800,000 KRW

• Monthly repayment capacity = 2,800,000 − 1,500,000 = 1,300,000 KRW/month
• 3-year plan (36 months): 1,300,000 × 36 = 46,800,000 KRW total repaid
• If unsecured debt is 100,000,000 KRW → 46,800,000 is repaid; the remaining 53,200,000 KRW is discharged

Repayment Period: Up to 5 Years, With Flexibility

The standard repayment term is 3 years (36 months). However, depending on your circumstances, it can be extended to a maximum of 5 years (60 months). A 5-year plan may be chosen when total debt is high or monthly repayment capacity is low.

The Application Process, Step by Step

1. 1Pre-consultation: Free consultations are available at courts or through the Korean Certified Administrative Agent Association.
2. 2Document preparation: Income verification, debt list, asset list, monthly expense records
3. 3Filing: Submit your application to the bankruptcy division of your regional district court.
4. 4Commencement order: The court reviews the application and typically issues a commencement order within 1–2 months.
5. 5Repayment plan approval: After a creditors' meeting, the repayment plan is formally approved.
6. 6Repayment execution: Deposit the monthly repayment amount into the court-designated account each month.
7. 7Discharge order: Upon completing the repayment period, the remaining debt is legally discharged.

Important Cautions

• Once personal rehabilitation commences, creditors cannot seize assets or pursue collections.
• A record is filed with the Korea Credit Information Service; financial transactions may be restricted for up to 5 years after completing repayment.
• Taking on new debt during the repayment period can result in the plan being revoked.
• Guaranteed debts (where you cosigned for another person's loan) are excluded from discharge.

Conclusion

Personal rehabilitation offers a genuine fresh start for those overwhelmed by debt. The first steps are confirming your eligibility and calculating your repayable amount. If needed, consult with a court or a licensed administrator to assess your specific situation and explore whether filing is the right move for you.