If you fall behind on a loan in Korea, there is a step that comes before the Credit Counseling and Recovery Service or the courts: asking the lender itself to adjust the debt. Article 35 of the Act on the Management of Personal Financial Claims and the Protection of Personal Financial Debtors (the Individual Debtor Protection Act) lets an individual debtor in arrears ask the creditor financial company for a debt adjustment, and Article 37(3) says the lender must notify its decision within 10 business days of receiving the request. If you get an adjustment plan, you decide whether to accept it within 10 business days (Decree Art. 32). Under Article 3(3) and Decree Article 4(2), this chapter (Arts. 31–40) doesn’t apply to a debt whose principal is 30 million won or more.
1. In arrears, you can ask the lender directly for a debt adjustment — in writing, by phone and so on.
2. The lender must notify its decision within 10 business days; time spent fixing documents isn’t counted.
3. It applies to debts with principal under 30 million won, and you have 10 business days to accept a plan.
Calculator
Updates as you type. We count business days as Monday to Friday, starting the day after the request (our reading); the Act and Decree we read don’t define a business day, so add weekday public holidays yourself. Document-fixing time is left out of the count (Art. 37(4)); time for outside data or opinions is left out up to 10 business days (Decree Art. 31(3)).
What a debt adjustment is — Art. 2(6)
Under this Act a “debt adjustment” means the creditor changing the terms of a personal financial claim it holds in one of these ways. It isn’t only a write-off; instalments and a longer term count too.
| Type | What the source says | Worth noting (ours) |
|---|---|---|
| (a) | Reducing principal or interest, or adjusting the rate | — |
| (b) | Repaying the old debt with a new loan | — |
| (c) | Repaying in instalments | — |
| (d) | Extending the repayment period | — |
| (e) | Other methods set by Financial Services Commission notice | We didn’t read the notice |
When you can’t ask — proviso to Art. 35(1)
| Item | When you can’t ask (summary) | Worth noting (ours) |
|---|---|---|
| 1 | Less than 3 months since an adjustment agreement was cancelled under Art. 40 | 3 months: Decree Art. 29(2) |
| 2 | A lawsuit, mediation or arbitration over whether or how much is owed is under way | — |
| 3 | A debt adjustment under Art. 72 of the Act on Supporting the Financial Life of Ordinary People (the credit recovery route) is under way | — |
| 4 | An agreement under Art. 74(1) of that Act was reached and is still in force | — |
| 5 | Rehabilitation, simplified or individual rehabilitation, or bankruptcy and discharge is under way | — |
| 6 | After a rehabilitation plan was approved, a discontinuance decision isn’t yet final | — |
What you hand in — Art. 35(2)–(3), Decree Art. 29
You ask in writing, by phone or another way set by notice (Decree Art. 29(1)). The papers are (1) the request, (2) a proposed plan, (3) evidence of your ability to repay, and (4) consent to collect, use, share and check your personal and credit information. You can leave out the plan (2) if it’s hard to draw up. If something is missing, the lender can set a period for you to fix it, and you must give honest information about your ability to pay (Art. 31(2)).
When the lender can refuse — Art. 36, Decree Art. 30
| Type | What the source says | Worth noting (ours) |
|---|---|---|
| 1 | Any of the six cases in Art. 35(1) above | — |
| 2 | You didn’t respond to requests to fix documents 3 or more times | Don’t miss those requests |
| 3 | You ask again about a debt whose procedure ended, with no marked change in your ability to pay | — |
| 4 (Decree Art. 30(1)) | The limitation period has run on the debt, among others | — |
| On refusal (Decree Art. 30(2)) | The lender must tell you about other routes — rehabilitation or bankruptcy, the credit recovery adjustment | — |
Even when it could refuse, the lender may offer a plan if that looks better for recovery (Art. 36(2)). A refusal on grounds outside Art. 36(1) carries a fine of up to 30 million won (Art. 52(2)5). Not notifying the decision, or notifying it falsely, carries up to 20 million won (Art. 52(3)9).
How the deadlines run — Arts. 37, 38, Decree Arts. 31, 32
| Type | What the source says | Worth noting (ours) |
|---|---|---|
| Decision (Act Art. 37(3)) | Notify the decision within 10 business days of receiving the request; if adjusting, attach a plan with a repayment schedule | In writing, by phone etc. (Decree 31(1)) |
| Time left out (Act (4), Decree (3)) | Time to fix documents isn’t counted; time for outside data or opinions isn’t counted up to 10 business days | Calculator rows 3 and 4 |
| Accepting (Act Art. 38(2), Decree Art. 32) | Decide within 10 business days of receiving the plan | If you don’t, the procedure ends (Art. 39(4)) |
| Agreement (Act Art. 38(1), (3), (4)) | Accept and sign a settlement document; the agreement then stands, and binds a buyer of the debt too | — |
On the calendar — our example
| Case (our example) | Decision due by | Worth noting (ours) |
|---|---|---|
| Request on 2026-11-03 (Tue), nothing to fix | 2026-11-17 (Tue) | 10 weekdays from the next day |
| Request on 2026-11-06 (Fri) | 2026-11-20 (Fri) | Two weekends in between |
| Request on 2026-11-03, 3 business days fixing papers | 2026-11-20 (Fri) | 10 + 3 = 13 business days |
| Notice received 11-17: accept or not by | 2026-12-01 (Tue) | Another 10 business days |
Our sum, treating business days as Monday to Friday and starting the day after the request. The Act and Decree say only “within 10 business days of receiving the request”; we found no definition of a business day in what we read.
Asking in time keeps the benefit of the term — Art. 6
When arrears pass the agreed period or count, the lender must, at least 10 business days before the planned date of losing the benefit of the term, send by registered post or hand delivery the date, the reason, the effect and how to ask for a debt adjustment (Art. 6(1), Decree Art. 5). If the notice arrives late, the loss happens 10 business days after it arrives (Art. 6(2)2). And if you ask for an adjustment by the day before the planned date (or, for a late notice, by the 10th business day after it arrives), the benefit of the term is treated as kept until the procedure ends (Art. 6(5)). It is lost on the day another creditor starts enforcement or another Decree ground arises.
Article 6 also doesn’t apply to debts with principal of 30 million won or more (Art. 3(3)). Where default interest can be charged after acceleration is in the late payment interest calculator.
If you can’t keep up after agreeing — Art. 40, Decree Art. 33
If you don’t follow the repayment plan for 3 months or more from the agreement (6 months where a notice recognises special circumstances), the lender can cancel it. Death or a declaration of disappearance, hiding assets or income, your own request, an approved rehabilitation plan or discharge, or a credit recovery agreement are also grounds. After cancellation you can’t ask again for 3 months (Art. 35(1)1).
Checklist
- ☐ The debt’s principal is under 30 million won
- ☐ Request and repayment evidence ready, and the request date on record (our tip)
- ☐ If you got a notice of acceleration, ask by the day before the planned date
- ☐ Don’t miss document-fixing requests 3 times
- ☐ Decide on the plan within 10 business days of receiving it
Questions that remain
What if I owe several lenders?
A request under this Act reads as going to each creditor separately. The credit recovery route that handles several lenders at once is under the Act on Supporting the Financial Life of Ordinary People, and while that is under way you can’t use this one (Art. 35(1)3).
Can I see the lender’s adjustment criteria?
Article 32(1) requires lenders to post the information needed for adjustment on their notice board and website. Decree Article 27 lists it; we didn’t set it out here.
Sources
- Korean law database (law.go.kr) — Act on the Management of Personal Financial Claims and the Protection of Personal Financial Debtors Arts. 2, 3, 6, 31–40, 52 — source (current text, effective 2 January 2026, Act No. 21065, amended 1 October 2025 by another Act; checked 3 November 2026). Definition (Art. 2(6)), the exclusion (Art. 3(3)), the acceleration notice and how a request keeps the term (Art. 6), request, refusal, handling, effect, end and cancellation (Arts. 35–40), fines (Art. 52), Addendum Art. 8 of Act No. 20054.
- Not read. The Act on Supporting the Financial Life of Ordinary People; FSC notices; case law.
- What we added. The “worth noting” column and the Korean everyday gloss.
Sources
- Korean law database (law.go.kr) — Act on the Management of Personal Financial Claims and the Protection of Personal Financial Debtors Enforcement Decree Arts. 4, 5, 29–33 — source (current text, effective 1 October 2025, Presidential Decree No. 35811; checked 3 November 2026). 30 million won (Art. 4(2)), how notices go (Art. 5), how to ask, 3 months and documents (Art. 29), refusal grounds and guidance (Art. 30), notice method, plan contents and time left out (Art. 31), 10 business days to accept (Art. 32), 3 and 6 months for cancellation (Art. 33).
- Not read. Arts. 27–28 in detail (published information, internal standards).
- What we added. The “worth noting” column and the Korean everyday gloss.
Where to check further
- The lender’s debt adjustment desk or website — the request form and its published criteria.
- The Credit Counseling and Recovery Service, or the court (individual rehabilitation) — for debts with several lenders.
- Financial Supervisory Service — complaints about refusal or delay (we didn’t read the complaints process).
Written on 3 November 2026. The content is from the source; the glosses are ours.
