1. Case Overview

The debtor in this case is a breadwinner born in 1982. He had been living diligently while operating a travel agency in the Philippines. However, due to business failure caused by the COVID-19 pandemic and subsequent fraud losses in a trading business venture, he incurred massive debt. Due to excessive "robbing Peter to pay Paul" (debt cycling) and additional loans, the debt snowballed to a principal of approximately 940 million KRW, leading him to Law Firm Theo in a state of total insolvency.
 

2. Case Specifics

The most significant point was the massive scale of debt exceeding 900 million won, much of which consisted of personal loans from individuals. Additionally, there was a risk that his desperate attempts to secure funds during the business failure could be misinterpreted as gambling or wasteful spending. With strong resistance expected from personal creditors, the difficulty of obtaining approval was much higher than average rehabilitation cases.

3. Legal Strategy and Assistance

Law Firm Theo focused on proving the force majeure causes of the business failure and the facts of the fraud through objective data. Specifically, we precisely calculated disposable income after deducting minimum living expenses for dependents from the debtor's monthly income. We legally argued the debtor’s practical repayment capacity while convincing the court that this offered a higher recovery for creditors than bankruptcy.

4. Outcome

Following a strict review by the Incheon District Court, Law Firm Theo’s arguments were accepted. An individual rehabilitation approval was granted with an exceptional condition: a 5% repayment rate. Consequently, out of approximately 940 million won in debt, the debtor will pay only about 36 million won over 60 months. The remaining 900 million won in principal and all interest will be discharged, providing a foundation for economic recovery.

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