'Getting a bank account changed my life': Seoul runs credit-recovery service for homeless residents

Park, a man in his 50s who works full time at the Seoul Station shelter counseling center, used to receive his wages in cash every payday because creditors had seized his bank account — leaving him constantly exposed to the risk of losing the money or being robbed. Afraid his debt problems would come to light, he had long avoided credit recovery counseling, until a caseworker persuaded him to give it a try. Through the counseling process, about 7 million won ($4,540) of his debt was settled, allowing him to open a bank account in his own name. "Just having a bank account has changed my life," Park said, expressing his joy at regaining financial independence.

The Seoul Metropolitan Government announced that 129 people had participated in credit recovery counseling through May this year, since the city partnered with the Credit Counseling and Recovery Service to support homeless people and other housing-vulnerable residents.

Seoul signed an MOU with the Credit Counseling and Recovery Service last December to provide credit recovery counseling for homeless people and other housing-vulnerable residents struggling with excessive debt. Sessions are held every Thursday from 3 to 4 p.m. at dedicated counseling windows at branches of the Credit Counseling and Recovery Service. The service is free, and the city supports about 100 counseling sessions per month.

As a result, 129 people took part in a total of 13 sessions through May. The counseling focused on helping clients restore normal financial lives through measures such as debt restructuring with financial institutions and opening seizure-protected bank accounts.

Of the 129 participants, 79 sought debt adjustments, including bankruptcy filings, and 54 of them — 68.4 percent — received confirmed debt adjustments. Of those 54, 48, or 89 percent, are currently making their debt repayments on time.

The city attributed the strong repayment rate to support that went beyond credit counseling — connecting clients to employment, welfare and residential services after their sessions, and encouraging those who had difficulty entering the private job market to join public employment programs for homeless people, helping them build a stable foundation for repaying debt and achieving independence.

Building on these first-half results, the city held a "credit recovery best-practices sharing session" at Seoul City Hall on Monday, attended by staff from homeless facilities and officials from autonomous districts. Participants and facility workers presented successful cases at the event.

Seoul plans to conduct ongoing monitoring to improve credit recovery support services for homeless people and other housing-vulnerable residents, and to actively promote the program through outreach and street counseling at homeless facilities so that more people struggling with debt can use the service.

"Many housing-vulnerable residents have debt problems but, as far as we know, do not actively seek solutions due to various circumstances and concerns," said Yun Jong-jang, Seoul's welfare director. "Seoul is here to help find solutions to debt problems, so please don't be afraid to use the dedicated credit recovery counseling windows."