Programs for aiding recovery from bad credit are being done away with on April 28, without any of the many of them ever having much of an effect helping people deal with their bad credit. One worries how now that the statistics will not be kept anymore our society will treat the problem with even more indifference.
The biggest reason why there has not been resolution to the problem is because of thinking that begins with creditors and places all responsibility with individual borrowers. There is something wrong with the "looting lenders" who let out so much money it was hard for individuals to handle, doing so by making use of the fact that money lent to individuals can be claimed as long as the person lives. Lenders, therefore, need to be held duly responsible. The country's personal recovery system used some of that logic, and even that has not contributed much to rescuing people from bad credit.
According to Supreme Court documentation released by Grand National Party (GNP) member of the National Assembly Joo Ho Young, 18,349 people applied for personal recovery assistance between September 2004 and March of this year. Even if you round up and assume that is around 50,000 a year it is still far under expectations. It means that even if only one third of the 3.6 million people with bad credit take that route it will still take 25 years. Even a bigger problem is how only 8.1 percent of people who applied to have their repayment plans approved and resolve their bad credit that way have succeeded. In Seoul 20 percent of applicants have had their repayment plans approved, but in other regional courts not even 10 percent are approved.
One notes the courts efforts in trying to make personal recovery programs work by reducing the repayment period to 5 years instead of the 8 allowed by law. You worry, however, that the big difference in plan approval rates by region might be the result of the fact that regional courts are applying different standards. They say that in some regional courts the work is slow because there are not enough people available to review applications. The problem of so many people with bad credit is one that is a source of anguish for those directly involved but it is also a burden for the whole of Korean society. Personal recovery should at least not fall behind for lack of enough court staff. The Supreme Court needs to be thoroughly review what is going on.
The Hankyoreh, 19 April 2005.
[Translations by Seoul Selection (PMS)]
Bad Management of Programs for Bad Credit |
