New Leap Fund cancels 499.2 billion won in long-overdue debt, bringing cumulative total to 2.3 trillion won

The New Leap Fund, the government's long-overdue debt restructuring vehicle, carried out its third round of debt cancellation on June 25, wiping out overdue loans held by financially vulnerable borrowers, the fund announced Tuesday.

The latest cancellation covered 499.2 billion won ($342 million) in long-overdue debt — representing 69,000 borrowers — drawn from the 9.12 trillion won in overdue loans the fund has acquired through its first through fifth purchase rounds.

The canceled debt included loans held by recipients of basic livelihood benefits, disability pension recipients, and veterans receiving living-adjustment allowances or livelihood support payments — groups exempt from repayment-capacity assessments. Also included were loans on which the statute of limitations had expired before the fund's acquisition, debts where the borrower had died, and loans whose statute of limitations lapsed after the fund took them on.

Combined with the first and second rounds, the fund has now canceled a cumulative total of 2.26 trillion won in debt covering 269,000 borrowers.

The New Leap Fund is progressively purchasing eligible loans from participating financial institutions. Collection efforts stop immediately upon acquisition, and each borrower's assets and income are then assessed before the fund decides whether to cancel the debt outright or restructure it.

The fund plans to continue canceling debt for vulnerable borrowers and statute-of-limitations cases every quarter. After an amended Credit Information Act takes effect on Aug. 13, the fund will begin full-scale repayment-capacity reviews and plans to cancel additional loans in the fourth quarter for borrowers found unable to repay.

Borrowers whose debts are canceled receive support through a range of financial rehabilitation programs. These include the lifting of legal measures such as bank account garnishments, along with related cost support. Borrowers who sign up for the "New Leap Plan," a mobile phone service operated through the postal service's budget carrier, can receive subsidies covering basic monthly communication fees for up to two years.

Borrowers eligible for support under this round of cancellations will be notified by text message starting in mid-July. They can also check their status through the New Leap Fund's website, its customer center, or any of 12 regional counseling centers nationwide.

Korea Exchange will hold "KOSDAQ CONNECT 2026," the Kosdaq market's largest investor relations event, from Tuesday through Thursday to mark the 30th anniversary of the Kosdaq market's launch, with attention focused on policies to revitalize the market and remove underperforming companies.