The Korea Asset Management Corporation (Kamco) announced on August 31 that it will specially write off 3.1 trillion won in debts that have been overdue for over 20 years to support the economic recovery of 44,000 individuals. The measure targets long-standing debt with no repayment history for at least seven years, expanding debt relief beyond the scope of existing bad-bank programs like the New Leap Fund.
Debt Relief Criteria and Scope
According to Kamco, the special write-down specifically targets obligations past due for 20 years or longer that lack any repayment records for a minimum of seven years. While bad-bank initiatives like the New Leap Fund actively purchase long-term delinquent debt for restructuring or write-offs, older liabilities often slip through those standard criteria. Kamco initiated this targeted cleanup after tracking unpurchased debts in its portfolio. Under relaxed income screening guidelines implemented for this sweep, approximately 38,000 debtors deemed entirely lacking repayment capacity received complete debt forgiveness, as reported by Kamco.
Guarantor Protections and Separate Evaluations
In cases where primary debtors retained repayment capacity and remained outside the special write-off parameters, Kamco instituted separate protections for associated parties. According to the agency, 6,000 co-signers and guarantors received independent assessments of their financial standing. Kamco waived the guaranteed debts for these individuals to dismantle what the agency identified as unfair joint-and-several liability burdens traditionally placed on guarantors despite their individual financial limitations.
Leadership Statements and Verification Process
“We hope that this special write-off will serve as an opportunity for individuals who have suffered economic difficulties due to long-term arrears to stand on their own feet again,” Kamco President Jung Jung-hoon said, according to Seoul Shinmun. Jung added that the agency will continue rigorous screenings to protect vulnerable debtors and provide follow-up assistance that turns debt relief into sustainable financial recovery.
Debtors seeking to check if their specific obligations qualify for the write-down can review their status starting in September. According to Kamco, verification is available through the Kamco Personal Credit Support website, the Kamco customer center, and the Korea Credit Information Services credit inquiry service.
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