Young Koreans are in debt

According to the Seoul Bankruptcy Court, from 2020 to now, the group of people aged 30-40 filing for bankruptcy tends to increase sharply and accounts for 25% of the total number of individual bankruptcy filings nationwide. .

A 36-year-old female bartender (who wished to remain anonymous) said that she had been working since the age of 20, but in early 2021 had to file for bankruptcy because she could no longer pay a debt of 100 million won (1 million won). ,8 billion) borrowed over the years to pay for living expenses. Another employee, 47, who works at a nightclub, also faced a similar situation, due to being unemployed for two years during the epidemic.

Many people have tried to settle the debt but cannot. A 33-year-old man closed his interior decoration company in 2020, after a year of business and incurring nearly 100 million won in debt. This person was then accepted into a company with a salary of about 200,000-300,000 won per month. During the layoffs, he was fired and eventually declared bankrupt.

In the past three months alone, the Seoul Bankruptcy Court has handled between 95% and 97% of applications filed by young people. A source at the court said: “We are processing applications so that young people can bounce back from the defeat of the pandemic.”

In fact, the group of people between the ages of 20 and 30 are reeling from personal debt when they actively borrow, look for investment opportunities, but cannot repay. Calculations by the Korea Economic Daily, based on central bank data, show that this group’s debt level has increased by 9.5% over the past year. Compared with previous generations, young Koreans now have lower incomes, own fewer assets and more debt.

Koreans began to fall into debt when the epidemic broke out. In addition, the loosened credit card policy combined with the rapidly growing real estate market in Seoul and urban areas also makes people who have been unemployed, now have to bear more loan sharks.

Faced with a clear gap between rich and poor, some young people turn to cryptocurrency investments to make quick money. This group of people accounted for 63% of the 2.49 million new subscribers to four crypto exchanges, Bithumb, Upbit, Korbit and Coinone, in the first quarter of this year.

Analysts say the growing debt of young people will make them pay higher interest rates, increasing the likelihood of breaking the law. Credit card debt among 20-somethings stood at 8 trillion won at the end of last year, up 16.6 percent from a year ago.

Notably, if the central bank starts tightening monetary policy later this year, many young Koreans will fall further into debt and struggle to repay it by taking out new loans.

Minh Phuong (According to Chosun Ilbo, kedglobal)