SEOUL, Sept. 27 (Korea Bizwire) — Personal and corporate bankruptcies filed in South Korea showed a double-digit increase last year, a report said Monday, due mainly to the economic impact of the COVID-19 pandemic.
The report issued by the National Court Administration said the number of personal bankruptcies filed in 2020 rose by 10.4 percent from the previous year, or 4,737 cases, to 50,379 cases.
Last year’s number was the biggest figure since 2015, when 53,865 personal bankruptcies were filed.
The number of personal bankruptcy filings peaked at 154,039 cases in 2007, due to the outbreak of a global financial crisis, but declined for more than 10 years until 2018. It rebounded in 2019 and increased for two consecutive years until last year.
The report also noted that the number of corporate bankruptcies filed last year totaled 1,069 cases, marking an on-year rise of 14.8 percent, or 138 cases.
It is the first time since record keeping began in 2004 that the annual number of filings for corporate bankruptcy exceeded 1,000.
It is believed that the steep increases in personal and corporate bankruptcies may have been caused by the outbreak of COVID-19 and associated economic contraction.
The report said the number of applications for individual rehabilitation procedures, in which some debt forgiveness is offered to those who faithfully fulfill their obligations, decreased 6.5 percent from the previous year, or 6,034 cases, to 86,553 cases last year.
The number of applications for real estate auctions decreased 9.8 percent, or 8,005 cases, to 73,403 cases, due to the rise in property prices.
When the real estate market booms, the number of auctions is usually reduced because sales are mostly concluded in the market.