A Complete Guide to the Personal Rehabilitation Process – From Application to Approval

 

 

Hello, everyone! 😊
Today, let's dive into the personal rehabilitation process, a legal system designed to help individuals struggling with excessive debt regain financial stability.
If you're considering applying for personal rehabilitation, this guide will walk you through each step of the process, from the initial application to the final approval.

Stay with me, and let's explore how you can successfully navigate this process! 👀

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✅ Understanding the Personal Rehabilitation Process

📌 STEP 1: Preparing for Application (Eligibility & Required Documents)
Before applying for personal rehabilitation, the first step is to check if you meet the eligibility criteria:
✔ Total unsecured debt must be less than 1 billion KRW ($750,000), and secured debt must be under 1.5 billion KRW ($1.1 million).
✔ You must have a stable source of income (salary, business income, pension, etc.).
✔ You must be able to repay a portion of your debts based on a structured repayment plan.

📝 Required Documents
✅ Personal Rehabilitation Application Form
✅ Debt & Asset List
✅ Income & Expense Statement
✅ Family Relation Certificate & Resident Registration Certificate
✅ Pay Stubs or Business Income Documents

💡 TIP:

• Since many documents are required, prepare a checklist in advance to ensure nothing is missing.
• If your income is difficult to prove, consult a professional to explore alternative solutions.

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📌 STEP 2: Submitting the Application to the Court
Once you have all the documents prepared, the next step is to file your personal rehabilitation application with the court.
After submission, creditors (lenders) are legally prohibited from debt collection and enforcement actions until a decision is made.

✅ Your application will be assigned a case number by the court.
✅ The court will review the documents and may request additional information.
✅ A decision on whether to proceed is typically made within one to two months.

💡 TIP:

• Be sure to list all debts accurately to avoid rejection.
• If additional documents are required, submit them as quickly as possible to avoid delays.

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📌 STEP 3: Submitting a Repayment Plan & Court’s Initial Approval
Once your application is accepted, the court will require you to submit a repayment plan outlining how you will repay your debt over a set period.

✅ Repayment plans usually last 3 to 5 years (maximum 5 years).
✅ You must use your disposable income (after covering essential living expenses) to repay debts.
✅ The court will carefully review and approve the plan before proceeding.

💡 TIP:

• Your repayment plan should be realistic and achievable to avoid rejection.
• If your financial situation changes, you must notify the court immediately.

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📌 STEP 4: Court Review & Creditor Objection Period
Before final approval, creditors (those you owe money to) have the right to review your repayment plan and raise any objections.

✅ If creditors agree with the plan, the process moves forward smoothly.
✅ If creditors object, the court may request modifications or additional documents.
✅ The court will then finalize its decision based on all the submitted information.

💡 TIP:

• Taxes, national health insurance, and other public debts cannot be discharged through personal rehabilitation.
• If multiple creditors file objections, the process may take longer than expected.

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📌 STEP 5: Final Court Approval & Start of Repayment
Once the court officially approves your personal rehabilitation plan, the repayment phase begins! 🎉

✅ You will start repaying your debts according to the approved plan.
✅ After completing the repayment period (typically 3–5 years), any remaining eligible debts are discharged (forgiven).

💡 TIP:

• If you fail to make payments as scheduled, your rehabilitation plan may be canceled!
• During the repayment period, new loans and credit card use may be restricted.

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📌 Summary of the Personal Rehabilitation Process

StepKey ActionEstimated Duration

STEP 1	Prepare application & gather documents	1–2 weeks
STEP 2	Submit to court & wait for review	1–2 months
STEP 3	Submit repayment plan	1–2 months
STEP 4	Court review & creditor objections	2–3 months
STEP 5	Final court approval & start repayment	3–5 years

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🔎 Important Things to Keep in Mind

✔ Stable income is essential – You need consistent earnings to qualify.
✔ Never provide false information – If you hide assets or debts, your rehabilitation may be revoked.
✔ Be disciplined in making payments – Failing to comply with the repayment plan could lead to cancellation of your case.
✔ Do not negotiate directly with creditors – The court process must be followed to ensure protection from debt collectors.

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🎯 Final Thoughts

Personal rehabilitation is a lifeline for individuals struggling with overwhelming debt.
However, it is a long and structured process that requires commitment and financial discipline.

If you are considering personal rehabilitation, make sure to analyze your financial situation carefully and seek professional advice if needed.
Taking the right steps today can help you rebuild your financial future! 😊

👉 If you found this guide helpful, don’t forget to “Like” and “Share”!
Stay tuned for more useful financial tips. Thank you for reading! 💖

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