Corporate bankruptcies up 2.4-fold in 4 years amid economic slump; personal insolvency filings also surge

Corporate bankruptcy filings have surged 2.4-fold over the past four years, new data shows.

An analysis of judicial yearbook data released Saturday by the office of Rep. Park Ji-won of the Democratic Party of Korea, a member of the National Assembly's Legislation and Judiciary Committee, found that courts received a total of 2,282 corporate bankruptcy filings last year.

The number of corporate bankruptcy filings rose every year, climbing from 955 in 2021 to 1,004 in 2022, 1,657 in 2023, 1,940 in 2024 and 2,282 last year.

Corporate rehabilitation cases — which primarily cover court-supervised restructuring — also rose 84 percent over the same period, from 717 to 1,321. Corporate bankruptcies, however, grew at a faster pace, surging 139 percent over the same span.

Personal insolvency filings also climbed sharply. Applications for personal rehabilitation rose 84.1 percent, from 81,030 in 2021 to 149,147 last year.

Personal rehabilitation allows individuals with a steady income to repay a portion of their debts in installments over a standard three-year period, extendable to a maximum of five years. The figures suggest a growing number of debtors are turning to the courts even while employed, unable to keep up with their obligations.

Personal bankruptcy filings — available to those with no income who cannot repay their debts — stood at 40,909 last year, holding steady in the 40,000 range for each of the past five years.

Real estate auction filings also rose 59.9 percent, from 62,116 in 2021 to 99,296 last year.

"These court statistics are a stark reflection of the reality facing businesses and households," Park said, urging courts to handle personal rehabilitation, bankruptcy and auction cases — matters directly affecting the lives of ordinary people and small business owners — more fairly and swiftly to contribute to public welfare.