The base rate is pushing up all interest rates.
This is a harsher time for self-employed people who have been living in debt for two years of Corona.
In September, financial support for the self-employed, which has been ongoing for two years and five months, will also end.
The 'sincere but unlucky' scenario of self-employed people going bankrupt is increasingly likely to become a reality.
Let's look at the stats.
The number of personal bankruptcy filings filed through April this year stood at 13,464, the lowest level in a decade.
Even compared to April 2019 (15,124 cases) before the corona, it is much less.
On the other hand, loans to individual businesses stood at 435.3 trillion won as of May, the highest ever.
Among them, the principal amount of debt, which is in a state of deferment of loan extension and repayment according to the financial support policy for the self-employed, has steadily increased to 133.8 trillion won as of January.
Debt has risen sharply, but bankruptcy has declined.
It is natural to interpret that the decline in bankruptcies is not because the economy is improving or the income of the self-employed has improved, but that more people are relying on financial support policies to survive.
This is why there are concerns that self-employed people who can't stand it and go bankrupt will pour in if the financial support for Corona ends and the rate hike trend continues for a long time.
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So, if you file for bankruptcy now, how long will it take to be sentenced?
The answer is, 'Every place you live is different'.
I brought the Supreme Court statistics.
There was wide variation between courts.
Based on cases sentenced from January to May of this year, the Seoul Rehabilitation Court, the only bankruptcy court in the country, takes an average of only 2.8 months from filing for bankruptcy to being sentenced.
The fastest is the Gwangju District Court, which takes 2.7 months.
On the other hand, the slowest Jeju District Court took an average of 10.1 months.
Depending on the region, the difference is nearly four times.
*Individual bankruptcy: When an individual debtor becomes unable to repay all debts with his/her property as a result of personal business or consumption activities, it is called personal bankruptcy when he/she files for bankruptcy to settle the debts.
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The time required for immunity also varies up to two times or more depending on the court.
In the earliest Seoul Rehabilitation Court, it takes an average of 8.5 months for the debtor to be discharged and start anew.
On the other hand, it takes an average of 17.1 months for self-employed people living in Jeju Island to decide on exemption.
* Waiver: This is to give a new start to the 'faithful but unfortunate' debtor who has been declared bankrupt due to bad luck such as natural disasters or economic fluctuations, not his/her fault. This is a system that promotes economic rehabilitation of the debtor by exempting the debtor from repayment liability according to the judgment of the bankruptcy court.
Only individuals, not corporations.
All disadvantages of being declared bankrupt, such as being declared bankrupt or not being able to work as a public official, will disappear.
From bankruptcy to indemnity, it takes an average of 11.3 months for the self-employed in Seoul, but two years and 3.2 more months for the self-employed in Jeju.
There is a difference of 1 year and 4 months.
It is also the difference in the amount of time you have to wait to recover.
So, these days, the number of tricks by which residents from other regions file cases with the Seoul Rehabilitation Court is increasing.
According to multiple bankruptcy trustees, they can obtain a gosiwon in Seoul and change their address, or pay a free residence confirmation certificate stating that they live in an acquaintance's house in Seoul.
Discovering that you are not a resident of your jurisdiction is grounds for dismissing your bankruptcy petition.
Nevertheless, it is said that there are many people who venture out to save time.
Front-line bankruptcy trustees cite the court's view of debtors as the biggest reason for the difference in the speed of processing between courts.
A bankruptcy trustee said, "The rehabilitation court has a strong tendency to focus on the quick recovery of the debtor as the fast-track process is in place. If only the cost of appointing a trustee in bankruptcy is negotiated with the debtor, they will issue a sentence almost immediately."
On the other hand, "Other courts tend to give priority to the rights of creditors, so it takes more time to carefully review the debtor's ability to repay and the documents required," he explained.
The workload was also slightly different.
As of April of this year, the number of individual bankruptcy cases per single bankruptcy judge varies by up to 6.3 times depending on the court.
Of course, the independence of the judiciary must be respected in hearing and adjudicating individual cases.
Just because it's fast doesn't necessarily mean it's good.
However, it is a question to consider whether such a large difference in the time it takes for self-employed 'sincere but unlucky' self-employed who have collapsed due to the different courts to recover from Corona is okay.