Can a foreign national living in Korea file for personal rehabilitation?

Yes. Korean personal rehabilitation (개인회생) is available to anyone residing in Korea with regular income and debts below the legal threshold — regardless of nationality. You will need a Korean address, an ARC (Alien Registration Card), and income documentation. A bilingual attorney is strongly recommended.

How much does a Korean rehabilitation attorney typically cost in 2026?

Retainer fees (착수금) generally range from ₩1,500,000 to ₩3,000,000 (roughly USD 1,100–2,200). A success fee of ₩500,000–₩1,500,000 may apply after court approval. Licensed legal scrivenors (법무사) handle paperwork at 20–30% lower cost but cannot represent you in hearings.

How is Korean personal rehabilitation different from US Chapter 13 bankruptcy?

Both involve a 3-to-5-year repayment plan under court supervision, with remaining debt discharged afterward. Key differences: Korea's process tends to be faster and cheaper; the US system uses a court-appointed trustee to manage payments; asset exemption rules differ significantly between the two countries.

What free legal resources exist in Korea for people who cannot afford an attorney?

The Korea Legal Aid Corporation (대한법률구조공단, KLAC) provides free attorney representation for low-income residents — including foreigners. Call 132 or visit a branch. The Korea Inclusive Finance Agency (서민금융진흥원) also offers debt counseling at no cost.

How long does it take to rebuild credit after a Korean personal rehabilitation discharge?

Credit bureau records related to the proceedings are typically removed within 5 years of discharge. Many people can access limited financial products (prepaid cards, small savings accounts) within 1–2 years. Building a consistent on-time payment history after discharge is the fastest path back to normal credit.

Korea Personal Rehabilitation & Bankruptcy Cost Guide 202...

Drowning in Debt in Korea? Here Is What Your Options Actually Look Like

Whether you are an English teacher who took out too many credit card loans, a startup founder whose business didn’t survive, or a long-term resident who hit a rough patch — Korean debt law has a structured exit route.

개인회생 (gae-in-hoe-saeng), formally translated as “personal rehabilitation,” is Korea’s equivalent of a managed repayment bankruptcy. It is not a shame-based admission of failure. It is a legal tool — and understanding how it works (and what it costs) is the first step.

What Is Korean Personal Rehabilitation?

Personal rehabilitation lets a debtor with regular income repay a court-set portion of their debt over 3 to 5 years. After completing the plan, the remaining balance is legally discharged. You keep your income and basic living expenses throughout.

This is distinct from personal bankruptcy (개인파산), which is for people with no income and requires liquidating most assets. Rehabilitation is designed for people who can generate income but cannot service their current debt load.

Eligibility Requirements — Do You Qualify?

Three Core Tests

1. Debt Ceiling

Unsecured debt (credit cards, personal loans): under ₩1 billion (approx. USD 730,000)
Secured debt (mortgage, vehicle loans): under ₩1.5 billion (approx. USD 1.1 million)

2. Regular Income You must demonstrate a stable, recurring income stream. This includes:

Employment income (full-time, part-time, or contract)
Business income
Rental income
Pension payments

For expats: income from a foreign employer paid into a Korean bank account generally qualifies, but documentation in Korean or with certified translations is required.

3. Repayment Capacity After deducting the court’s minimum living expense standard (최저생계비) from your income, the remaining “disposable income” must cover a defined monthly repayment amount over the plan period.

Who Should Consider Bankruptcy Instead?

If you have no income at all, or your debts far exceed the caps above, personal bankruptcy (개인파산) followed by discharge may be more appropriate. The two paths are not mutually exclusive — many people attempt rehabilitation first and switch if circumstances change.

Repayment Period — How Long Is the Commitment?

Standard: 3 Years (36 Monthly Payments)

The court approves a repayment plan and you make fixed monthly payments for 36 months. Miss a payment without court approval and the plan can be revoked.

Extended: Up to 5 Years

The court may extend the period to 60 months if:

Your income is low enough that a 3-year timeline would leave you below minimum living standards
Extension better protects creditor interests

The monthly amount is fixed at plan approval. You cannot voluntarily reduce it later without court permission.

Attorney and Legal Fees — The Real Numbers

Retainer Fee (착수금) — Paid Upfront

Service Provider	Typical Range
Attorney (변호사)	₩1,500,000 – ₩3,000,000
Legal Scrivener (법무사)	₩1,000,000 – ₩2,000,000

These figures reflect the Seoul metropolitan market in 2026. Provincial cities may run 10–20% lower. Complex cases (many creditors, disputed claims, self-employed income) tend toward the higher end.

Success Fee — Paid After Court Approval

Service Provider	Typical Range
Attorney	₩500,000 – ₩1,500,000
Legal Scrivener	₩300,000 – ₩800,000

Some firms bundle retainer and success fee into a single flat quote. Always ask specifically whether the quoted amount is all-inclusive.

Court Filing Costs

Stamp duty (인지대): a few thousand to tens of thousands of won, based on debt amount
Service fees (송달료): approximately ₩30,000 – ₩50,000
Court examiner fee (조사위원 비용): ₩300,000 – ₩500,000 in some cases

Total realistic cost with an attorney: ₩2,500,000 – ₩5,000,000 all-in.

Attorney vs. Legal Scrivener — Which Do You Need?

Attorney (변호사)

Can represent you at court hearings
Can argue against creditor objections
Provides full legal strategy, not just document preparation
Higher cost

Legal Scrivener (법무사)

Prepares and files all court documents
Cannot appear in court on your behalf
Sufficient for straightforward cases with cooperative creditors
20–30% cheaper than attorneys

For expats specifically: a bilingual attorney provides the added value of communicating in English during consultation, which legal scriveners rarely offer. If language is a barrier, the attorney premium is worth it.

Free and Low-Cost Legal Aid Options

Korea Legal Aid Corporation (대한법률구조공단 / KLAC)

The KLAC is the most important resource for anyone who cannot afford private fees.

Free attorney representation for qualifying low-income residents (including foreigners)
Income threshold in 2026: approximately ₩3,000,000/month or below (varies by household size)
Call: 132 (Korean-language hotline; interpreter services available)
Website: klac.or.kr
Walk-in branches in every major city

Korea Inclusive Finance Agency (서민금융진흥원)

Free debt counseling and referrals
Connects clients with rehabilitation, debt adjustment, and microfinance programs
Call: 1397

Municipal Legal Aid

Seoul’s Dasan Call Center (120) connects callers to free legal consultations. Other major cities have similar programs through community welfare centers.

DIY Filing — Is It Possible Without an Attorney?

Yes. The Seoul Rehabilitation Court (서울회생법원) publishes standardized forms and plain-language guides for self-filers.

Where to Get the Forms

Seoul Rehabilitation Court website (seoulbankruptcy.scourt.go.kr)
Court reception desk (직접 방문)

Honest Assessment of DIY

Works well when:

You have 3 or fewer creditors
Your income is straightforward (single employer, W-2 equivalent)
You have time to research and file carefully

Gets complicated when:

A creditor files an objection to the plan
You are self-employed with variable income
Your debt includes disputed amounts

For expats: court documents are in Korean. DIY filing requires either fluent Korean or a trusted bilingual helper.

After Discharge — Rebuilding Your Financial Life

What Discharge Means

Legal obligation to repay discharged debt is eliminated
Tax debts, child support, and fraud-related debts are generally not dischargeable
Credit bureau entries related to the proceedings are removed within approximately 5 years

Practical Credit Recovery Timeline

Time After Discharge	What Typically Opens Up
Immediately	Debit cards, prepaid cards, basic savings accounts
1 year	Some secondary lender small loans
2–3 years	Gradual access to primary bank products
5 years	Most credit history reset; approaching normal baseline

The single most effective action: open a small, automatic savings product immediately after discharge and never miss a payment.

How Korea Compares to US Chapter 13

If you are familiar with US bankruptcy law, this side-by-side may help:

Feature	Korea Personal Rehabilitation	US Chapter 13
Repayment period	3–5 years	3–5 years
Income requirement	Yes	Yes
Asset protection	Minimum living standard exemption	State-specific exemptions
Trustee system	Court-supervised (no separate trustee)	Court-appointed trustee manages payments
Attorney cost	₩2.5M–₩4.5M total	~USD 3,000–6,000
Automatic stay on collections	Yes (upon filing)	Yes (upon filing)
Foreign nationals eligible	Yes	Yes (if residing in the US)

Korea’s system is notably leaner in administrative structure, which generally means lower total cost.

Steps to Take Right Now

List all debts — creditor names, balances, interest rates
Document your income — pay stubs, bank statements, tax records (소득확인서)
Call KLAC at 132 — free consultation, available in multiple languages
Research your options — rehabilitation vs. voluntary debt adjustment (신용회복위원회)
Choose a professional — attorney for complex cases, scrivener for simple ones, KLAC if income-eligible

Korea Personal Rehabilitation & Bankruptcy Cost Guide 2026 — What Expats Need to Know