KAMCO Writes Off 3.1 Trillion Won in Long-Term Delinquent Bonds Over 20 Years Old, Supporting 44,000 People

Bonds with No Repayment History for More Than 7 Years Targeted

Debt Relief Granted to 38,000 Individuals

6,000 Guarantors Lacking Repayment Capacity

Freed from Joint Guarantee Burdens

Korea Asset Management Corporation (KAMCO) will provide a fresh start for approximately 44,000 vulnerable debtors and guarantors by carrying out a special write-off of long-term delinquent bonds worth 3.1 trillion won that have been in arrears for more than 20 years.

On August 31, KAMCO announced that it had conducted a second special write-off in order to proactively clear long-term delinquent bonds that were not included for sale in the New Leap Fund. This is a separate measure from the regular annual write-offs of bonds.

The special write-off targets bonds that have been delinquent for over 20 years and have no history of repayment for at least the past seven years. For this round, KAMCO eased the income screening criteria compared to the first special write-off held in December last year, examining the repayment ability of debtors. As a result, the company relieved about 38,000 individuals, including related parties, judged unable to repay their debts.

If the principal debtor has the ability to repay and the bond is therefore not eligible for special write-off, but the guarantor lacks repayment capacity, KAMCO still forgave the guarantee obligation separately. Consequently, 6,000 guarantors and other related parties have been freed from joint guarantee burdens.

KAMCO explained that, by separately assessing the repayment capacity of both principal debtors and guarantors, it has resolved the issue where guarantors with no repayment ability were still burdened with debt due to the principal debtor.

Previously, in December last year, KAMCO conducted a first special write-off of approximately 700 billion won in bonds, focusing on vulnerable groups such as recipients of basic living subsidies. This relieved the debt burden for 20,000 long-term delinquent debtors.

Individuals can check whether their bonds have been written off during September via KAMCO's Oncredit website, the customer support center, or the Credit4U service of Korea Credit Information Services. Since 2017, KAMCO has written off bonds worth 41 trillion won for 3,481,000 debtors.

Jung Junghoon, President of KAMCO, stated, "I hope this special write-off will allow those who have struggled to participate in economic activity due to prolonged delinquency to get back on their feet," adding, "We will continue to support vulnerable debtors through rigorous screening and ensure that debt relief leads to real economic recovery."

This content was produced with the assistance of AI translation services.