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1 million people to benefit from state-led debt workout programs

The number of individuals benefiting from the government-led debt-restructuring programs will reach up to 1 million this year, data showed Sunday.

The Park Geun-hye government has been pushing to rescue people saddled with debt for a long time as part of efforts to help them resume their ordinary economic lives. This is also part of a drive to ease rising household debts, which are feared to weigh on the overall economy.

In a related move, the government recently launched the debt relief program dubbed the “National Happiness Fund.”

According to data and estimates provided by the financial industry, the government is expected to provide debt restructuring for up to 1 million people this year through such agencies as the Financial Services Commission, Korea Asset Management Corp., and Credit Counseling and Recovery Service.

So far, the National Happiness Fund has received about 110,000 applications and the number will likely increase to about 500,000 by the end of this year as those involved in joint sureties are also included in possible beneficiaries.

If the coverage is expanded further to include smaller debtors in the second half, observers expect the number could rise further to 700,000.

Another fund providing loans for people to pay off their previous debts has also received 10,000 applications over the past month, and the number is expected to increase to 70,000-80,000 by the end of this year, market experts said.

In addition to that, the government decided to save the so-called “house poor,” which refers to those unable to pay off debts, including mortgages, due to a price plunge in their property value.

By encouraging banks to help them by extending repayment dates and deferring auctions of properties of debtors, the government expects to rescue about 22,000 households this year. (Yonhap News)
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