Financial assets and coins to be checked during debt adjustment... "Prevent moral hazard"

Saechulbal Fund [Yonhap News Agency data photo]

The Financial Services Commission announced on the 23rd that an amendment to the 'Act on the Use and Protection of Credit Information', which includes these provisions, has passed the plenary session of the National Assembly.

The amendment establishes a 'Special Provision for the Provision of Credit Information to Debt Adjustment Bodies', allowing debt adjustment bodies to receive and utilize information on debtors' financial assets such as deposits, savings, and securities, as well as virtual asset holdings, and income/asset information (such as tax and real estate information) from information-holding institutions.

Previously, debt adjustment bodies found it difficult to verify debtors' financial assets or virtual asset holdings without the debtor's consent, in accordance with relevant laws and regulations.

While repayment ability had been assessed primarily based on real estate and tax information, there have been calls for more thorough asset reviews to prevent moral hazard.

The Financial Services Commission explained that the purpose is to enhance fairness between those subject to debt adjustment and those who diligently repay their debts through a more precise assessment of repayment ability.

However, information will be provided to the minimum extent necessary, and debt adjustment bodies must individually notify debtors of the information inquiry and allow them to verify the inquiry details.

This special provision will be temporarily applied for three years from its effective date. The law is expected to take effect in August, three months after its promulgation.

The Financial Services Commission stated, "With this amendment, the government's debt adjustment bodies will be able to conduct more thorough assessments of debtors' repayment abilities," adding, "Through this, we will operate the system to ensure that benefits reach those who truly need support."