Individual rehabilitation in Busan: repay what you can, start over

Yes. If one spouse's individual rehabilitation case is pending at the Busan Bankruptcy Court, the other spouse may file with that court, and the same rule applies between a principal debtor and a guarantor or between joint debtors on the same debt (Debtor Rehabilitation and Bankruptcy Act, Article 3(3)3). Each spouse still files a separate application and repayment plan, and each is reviewed on their own income and assets.

As a rule, no. Claims listed in the creditor list cannot be paid or collected except under the repayment plan (Debtor Rehabilitation and Bankruptcy Act, Article 582), and paying only a particular creditor after filing can be avoided by the trustee (Article 584, applying Article 391 mutatis mutandis). Once a stay or prohibition order is issued, even demanding payment is prohibited (Article 593(1)4).

Yes. Claims arising from causes before the commencement decision are individual rehabilitation claims even if they are not yet due (Debtor Rehabilitation and Bankruptcy Act, Article 581, applying Article 425 mutatis mutandis), and claims left off the list are not discharged (Article 625(2)1). We fix the amount owed to each creditor, including card charges made just before filing, and then prepare the list.

The law does not make cancelling insurance a requirement. However, all assets you hold at the time of the commencement decision belong to the rehabilitation estate (Debtor Rehabilitation and Bankruptcy Act, Article 580(1)), so the surrender value is counted as an asset and reflected in the liquidation value test (Article 614(1)4). The portion of insurance benefits and surrender value of protection-type insurance that is exempt from seizure is excluded from the estate (Article 580(3); Civil Execution Act, Article 246(1)7).

No. When a creditor or the rehabilitation commissioner states an objection, the court confirms the plan only if, in addition to the basic requirements, extra conditions such as committing all disposable income and meeting the minimum repayment amount are satisfied (Debtor Rehabilitation and Bankruptcy Act, Article 614(2)). An objection makes the review stricter but does not end the case. If an objection is raised at the creditors' meeting, the debtor explains the repayment plan (Article 613(2) and (5)).

If the court or the rehabilitation commissioner asks, you must explain any change in income (Debtor Rehabilitation and Bankruptcy Act, Article 602(2)). When income rises, a creditor or the commissioner may also submit a proposal to modify the repayment plan (Article 619(1)), and when it falls, the debtor can submit one. Reflecting a job change in the repayment plan is safer than hiding it.