Debt-workout applications by South Korean seniors have jumped as economic hardship landed hardest on the weakest segment in the Korean society.

Applicants for debt workout, or relief arrangement with lenders to avoid bankruptcy filing, aged 60 years or older reached 7,249 as of July, already at 82 percent of the full-year tally of 2018, according to Credit Counseling & Recovery Service.

The growth has picked up sharply this year. Monthly average numbered 550 in 2016, 658 in 2017 and 737 in 2018. But the figure jumped to 1,036, up a whopping 40.5 percent from a year ago.

The debt-workout program is designed to help debtors repay what they can through debt repayment plans including debt relief and rollover. In general, when the economy worsens, more people have trouble paying off debt due to lower incomes, and more people apply for debt-workout programs.

The latest sharp increase seems to be driven by job losses of elderly apartment guards affected by rapid minimum wage hikes in the past two years and business withdrawals by self-employed persons who are mainly over 60 years.

The number of debt-workout program applicants totaled 4,910 persons in the January-July period this year. Applications by self-employed persons turned upward with 7,363 cases in 2017 and 7,590 in 2018 after a decline to 7310 cases in 2014, 7211 in 2015 and 7,007 in 2016. The monthly average figure increased to 614 in 2017, 633 in 2018 and to 701 this year, up 10.9 percent from a year ago.

The number of self-employed workers is 6,860,000 persons in Korea and 30.2 percent, or 2,070,000 of them are aged 60 years or older, according to Statistics Korea.

By Choi Seung-jin and Minu Kim

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]