Financial Committee, strengthening debt restructuring review... Virtual assets are also included in the review scope

The government has revised relevant laws to close legal gaps in debt adjustment review processes. In the future, debt adjustment agencies such as the “New Jumpstart Fund” and the “New Starting Point Fund” will be able to verify the financial assets and virtual asset holdings of debtors.

The Financial Committee stated on the 23rd that the amendment to the “Credit Information Utilization and Protection Act,” which includes the above content, has been passed by the full Congress. The core of this revision is the new establishment of a “special provision for providing credit information, etc., to debt adjustment agencies.” Accordingly, debt adjustment agencies can obtain details of deposits, savings, securities, virtual assets holdings, as well as income, property information, tax information, and real estate data from information-holding institutions for review.

Previously, due to legal restrictions, debt adjustment agencies found it difficult to confirm the current holdings of financial or virtual assets without the debtor’s consent. Therefore, in practical reviews, assessments often focused on real estate or tax information to judge repayment ability. However, recently, cases of assets held in financial products or virtual assets, beyond tangible real estate, have been increasing, and the demand for more accurate differentiation between those in need of aid and those not is growing. Since debt adjustment is a system designed to help vulnerable borrowers facing repayment difficulties, there have been ongoing concerns that insufficient asset review could lead to moral hazard issues, such as abuse of the system.

Financial authorities explained that this move aims to establish a mechanism to improve fairness. In fact, debt adjustment involves significant benefits such as principal forgiveness or extended repayment periods. If individuals with assets exploit the system, it could create serious imbalance with honest borrowers. The policy’s goal is to more precisely screen aid recipients through detailed reviews, thereby focusing limited fiscal resources on those truly facing repayment difficulties. However, information sharing will be limited to the minimum necessary, and debt adjustment agencies must notify debtors of individual inquiries and ensure that debtors can verify the inquiry records.

This special provision will be valid for three years from the date of implementation. The law is expected to come into effect in August, three months after its announcement. The Financial Committee believes that through this revision, government debt adjustment agencies will conduct more thorough assessments of repayment capacity. This trend may indicate that future debt adjustment systems will no longer simply be broad aid for overdue borrowers but will develop toward more detailed consideration of actual repayment ability and asset structure.