President Lee Jae-myung on the 11th said, "It is best for creditors, debtors, and society to clear debts that cannot be resolved." He added, "While failure to repay debt is basically the debtor's fault, the prevailing view lately is that creditors also bear responsibility for lending excessively without considering that (repayment capacity)." He meant that financial and lending institutions should support debt relief, including by purchasing the debt themselves, to prevent debtors from making extreme choices due to collection on long-term delinquencies.
On the day, Lee presided over a Cabinet meeting at the Government Complex Sejong and, after receiving a report from Minister Jung Eun-kyeong of the Ministry of Health and Welfare on the "pan-government suicide prevention plan," said, "We must constantly maintain a real sense of caution about debt that cannot be resolved," and, "As advanced countries do, debts that cannot be repaid under the system should allow a fresh start, and this must be put into practice continuously in the field."
According to the Ministry of Health and Welfare, the number of people who died by suicide in Korea last year was about 13,900. Of these, 54% held liabilities at the time of their extreme choice, and 78% of those who died by suicide had a total monthly household income of less than 2 million won. Minister Jung said, "Through May this year, the number of people who died by suicide provisionally decreased by 733, down about 12.3% from a year earlier," and noted, "We see the reduction in the economic crisis of financially vulnerable groups due to government measures as the main reason for the decline in people who died by suicide."
In response, Lee said, "Professional lenders anticipate that a certain portion of debts will become nonperforming, and isn't all of that (interest) expense handled in advance?" He added, "When a situation that was actually foreseen occurs and repayment is not possible, liquidation was originally expected, but they are too stingy." He continued, "The Korea Legal Aid Corporation handles applications for debt liquidation, credit recovery, and bankruptcy, but the expense alone runs into several million won," and said, "We decided to increase the budget and personnel, but it is still insufficient, so the Credit Counseling & Recovery Service (CCRS) or the lending institutions themselves should carry out the liquidation."
Lee has repeatedly called for "liquidating debts that cannot be repaid." On June on a Cabinet meeting, after receiving a report from Lee Eog-weon, chairman of the Financial Services Commission (FSC), on long-term delinquent bonds, Lee said, "If someone is about to die because of debt, that person is in fact someone who cannot repay," and instructed the creation of a special body to identify those without repayment capacity. He also mentioned the New Leap Fund system aimed at rescuing long-term delinquents and said, "Some worry about 'moral hazard' like 'if I hold out, they'll waive it, so let's endure,' but it is impossible to deliberately not pay for years while accepting that you cannot get a job, cannot open a bank account, and cannot engage in economic activity."