A citizen receives consultation at a bank branch in Seoul. (Yonhap)
SEOUL, Oct. 29 (Korea Bizwire) – South Korea will expand financial protections for low-income debtors next year, introducing a new “livelihood account” that shields up to 2.5 million won (US$1,740) per month from seizure.
The Ministry of Justice said Tuesday it will propose a revised enforcement decree to the Civil Execution Act that raises the non-seizable minimum living expense allowance and formalizes a dedicated account system beginning in February 2025.
Currently, up to 1.85 million won in monthly living costs is legally protected from seizure. In practice, however, banks cannot verify a debtor’s total deposits and frequently seize funds first, leaving individuals to challenge the action in court.
Under the new system, each debtor will be able to open one designated livelihood account at a domestic financial institution, where up to 2.5 million won per month is fully protected. If the account balance falls below that threshold, additional funds held in ordinary accounts may also be safeguarded up to the limit.
The change will also raise the minimum non-seizable portion of wages to 2.5 million won and expand protections for insurance payouts: the shield for life insurance benefits will rise from 10 million to 15 million won, and for maturity or cancellation refunds from 1.5 million to 2.5 million won.
The ministry said the policy aims to strengthen basic protections for debt-burdened households and help vulnerable groups, including small business owners and young people, regain financial stability.
“By reinforcing safeguards for debtors and their families, we hope to support economic recovery and create a stronger pathway for a fresh start in life,” the ministry said.
M. H. Lee (mhlee@koreabizwire.com)
