Korea to delete overdue records of 2 million self-employed individuals

[Photo by Yonhap]

The South Korean government and the ruling People Power Party (PPP) plan to erase debt overdue records of about 2 million self-employed individuals and vulnerable groups in a financial scheme to allow them access to new loans.

According to the ruling party on Wednesday, the government and the PPP will announce related details during a meeting on Thursday. Attendees include Yu Eui-dong, chief policy maker of the ruling party, and Kim Joo-hyun, chairman of the Financial Services Commission.

Under the current financial laws, those falling 90 days or more behind on debt repayments face a loan delinquency record lasting up to five years. Financial institutions share the data and those delinquents often find it difficult to borrow money or issue credit cards.

The credit recovery scheme, which was first unveiled in a public panel discussion on January 4, is expected to take effect before the Lunar New Year holiday. It will be the fourth scheme of its kind after 1999, 2013, and 2021.