In South Korea there has been an alarming increase of insolvency cases among people aged 20 to 39 in recent years. The Seoul Rehabilitation Court claim that this is largely due to the rise in economic activities such as cryptocurrency and stock market investment by young people. According to the Ministry of Government Legislation, South Korean individuals are able to apply for “personal rehabilitation” status and follow a court-approved three year plan. This gives them an opportunity to pay back their debt without facing any special disadvantages by law. Last month, the number of applicants exceeded 10,000 for the first time in history and half of these debtors belong to the 2030 age group. Furthermore, there was an increase of 3,875 personal bankruptcy applications in March this year compared to last year.

Young South Koreans are becoming more and more involved in cryptocurrency. This is because of a number of contributing factors such as youth unemployment rate of over 7%, a stagnant stock exchange, and the increasingly inaccessible housing market. Financial advisors have even started to suggest holding a certain percentage of their assets in crypto for people in this age group.

The issue of youth insolvency is a serious problem. Further measures need to be taken to address this issue. Creating opportunities for young entrepreneurs and businesses and helping them access credit, building a more viable stock market and providing advice on financial matters would be a start. Educating about the consequences and risks of cryptocurrency is also necessary. By doing so it would help protect people from debt and financial hardship. In providing these, the South Korean public sector would help to reduce the number of young people filing for personal insolvency or bankruptcy.



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