In a capitalist economic system debtors may find themselves at any time unable to pay back their debts due to a financial crisis. In this situation, creditors end up incurring costs repeatedly suing the debtor and collecting on their debt, while the debtor is not only distressed by the repeated attempts at collection but unable to conduct a normal economic life due to creditors collecting every time the debtor has income.

Rehabilitation and bankruptcy give debtors under financial distress the chance to be released from liability for their debts so they may make a fresh start through new economic activity, and so that creditors can also cease wasteful, repetitive, and fruitless efforts at debt collection. In Korea there are different forms of corporate and personal rehabilitation and bankruptcy to balance the interests of an insolvent debtor and their creditors. The debtor can also be released from liability after making rehabilitation efforts for a period in good faith, and thus be able to again engage in normal economic activities.

Rehabilitation and bankruptcy, due to the need to balance the interests of multiple creditors and the debtor, employ different principles of law than general civil law. Haemaru is an expert in this area and will provide the legal services that clients in these difficult circumstances need.
Individual Rehabilitation and Bankruptcy
Individual rehabilitation and bankruptcy are for individuals in financial crisis who need release from debt liability due to the failure of their businesses or an excessive debt burden. In individual bankruptcy, the debtor must in good faith prepare and submit a list of their current assets and creditors, and provide a detailed account of how they became insolvent. In individual rehabilitation, the debtor must prepare in good faith a plan for future income and debt repayment. They then conduct business in close cooperation with the bankruptcy executor or individual rehabilitation commissioner and are granted final release from liability. Haemaru provides guidance on the explanatory materials needed for the process and presents the best path for indemnification tailored to each client’s circumstances.
Corporate Rehabilitation and Bankruptcy
The aim of corporate rehabilitation is to resolve the debts of a corporation that is in financial distress but may become solvent again, and normalize its activities by granting indemnity after a period of executing a rehabilitation plan in good faith. Corporate bankruptcy, on the other hand, refers to a process where the debts of an insolvent corporation without hope of recovery are resolved by exhausting its remaining assets to repay its debts and dissolving the corporation. The most important step in corporate rehabilitation or bankruptcy is to determine whether it is in the best interests of the debtor and creditors to keep operating the corporation and obtain a profit, or to cease operations and resolve liabilities at the current state. Haemaru provides comprehensive legal services necessary for this process.
Counsel for Rehabilitation or Bankruptcy Creditors
Rehabilitation and bankruptcy are crucial procedures not only for insolvent debtors who can no longer pay their debts, but also for creditors who are unable to obtain full satisfaction. Creditors must declare their debt at appropriate times, and must prove the existence of their claims through procedures such as litigation if the debtor denies the debt. Haemaru also provides comprehensive legal services to secure the claims of the creditors and protect their interests.
Representative matters:
  • Multiple Corporate rehabilitation cases (2014-2016)
  • Intermediary appeal for a decision to permit individual bankruptcy and indemnity (2017)
  • Case responding to the exercise of the right of renunciation by a bankruptcy executor (2017)
  • Counsel for a P2P corporation in applying for corporate rehabilitation (2016-2017)
  • Counsel for a steel corporation in applying for corporate rehabilitation (2016)
  • Counsel for a rehabilitating corporation’s representative director in applying for general rehabilitation etc. (2016)
  • Counsel in an objection to a litigation for confirmation of credit investigation (2017)