The most immediate effect of the appointment of a debtor agent is that direct contact between creditor and debtor is blocked. (Image: Korea Bizwire)
SEOUL, Jan. 6 (Korea Bizwire) – The government plans to hire lawyers who will prevent further losses to those who have been subjected to excessive bond collection by lenders or illegal private lenders.
Financial authorities said Sunday that they plan to start a project to support the appointment of lawyers and legal counsels as early as the end of this month.
The debtor agent system allows the creditor to consult only with the debtor’s representative on matters concerning the repayment of debt if the debtor borrows money from a loan company or an illegal private financial company appoints a lawyer.
The system was launched in 2014 to prevent vulnerable people who borrowed money from lenders and illegal financial institutions from incurring damages from the collection of illegal and excessive bonds.
While there is a lack of widespread public awareness of this initiative, it has also remained an unpopular option do the high cost.
To address this problem, the government decided to provide financial support for the selection of debtors starting this year, and set aside 1.15 billion won (US$984,100) in the budget.
If one has been subjected to illegal or excessive bond collection, loan rates exceeding the legal maximum rate of 24 percent per annum, and overdue interest rates exceeding 3 percent per annum, one should file a report with the Financial Supervisory Service or the Korea Legal Aid Corporation.
If these organizations decide that one needs a debtor agent, they will provide free legal assistance.
The most immediate effect of the appointment of a debtor agent is that direct contact between creditor and debtor is blocked.
All access will be blocked, such as home visits, telephone calls or contact via social media. Creditors will only be able to communicate with a debtor in all forms through the debtor’s agent.
M. H. Lee (mhlee@koreabizwire.com)
