Nearly 100,000 South Koreans entered debt-restructuring programs in the first half of 2026, as high living costs and borrowing expenses continue to strain financially vulnerable households and small-business owners.
As of Aug. 31, about 97,200 borrowers had received approval for one of the country’s major debt-restructuring programs during the first six months of the year. Their combined debt totaled about 5.74 trillion won, or roughly $4.3 billion.
The number of borrowers seeking relief has climbed steadily in recent years. About 189,100 people entered debt-restructuring programs in 2025, up from roughly 174,800 in 2024 and 167,400 in 2023. Since 2022, the annual total has increased by about 56%.
The first-half figure already represents more than half of last year’s total, putting the number of borrowers on pace to exceed the 2025 level if the current trend continues.
Individual borrowers accounted for about 85,000 cases in the first half, while self-employed borrowers accounted for roughly 12,200.
A particularly notable increase is occurring among borrowers seeking help at an early stage of delinquency.
South Korea’s debt-restructuring system offers different programs depending on how long a borrower has missed payments. Borrowers delinquent for 30 days or less can seek expedited restructuring, while those 31 to 89 days behind can enter a pre-workout program. Borrowers delinquent for 90 days or more can qualify for a personal workout.
Approvals for expedited restructuring have more than tripled since 2022, reaching about 53,600 in 2025, compared with roughly 16,800 four years earlier. Another 27,000 borrowers entered the program during the first half of this year.
Older borrowers are increasingly represented in the data. Among people in their 60s, expedited restructuring approvals rose to about 5,300 in 2025, from roughly 1,000 in 2022. For those age 70 and older, approvals increased to about 1,700, from just 239.
During the first half of 2026, borrowers in their 60s and those 70 and older together accounted for about 14% of expedited restructuring cases.
Longer-term delinquencies are also increasing. Personal workout approvals, generally available to borrowers at least 90 days behind on payments, rose to about 99,900 in 2025 from roughly 81,000 in 2022.
The second quarter of 2026 alone saw about 30,100 personal workout approvals, the highest quarterly level in the past five years.
The growing demand for debt relief is accompanied by another warning sign: some borrowers are returning to the credit market even after successfully restructuring their debt.
During the first half of the year, financially vulnerable borrowers who had been making payments as agreed submitted about 26,700 applications for small loans, totaling approximately 78.8 billion won, or $59 million.
Applications in the second quarter reached nearly 14,900, totaling about 47 billion won, or $35 million, also the highest quarterly level since 2022.
The figures suggest that debt restructuring isn’t necessarily resolving the underlying financial strain. For some households, restructuring may provide temporary relief while leaving them dependent on new borrowing to cover basic living expenses.
That creates a potentially persistent cycle in which borrowers fall behind on payments, restructure their debt, return to repayment and then borrow again to meet everyday expenses.
The trend is likely to remain a concern as household budgets face continued pressure from elevated prices and borrowing costs.
Policymakers face a growing challenge: helping vulnerable borrowers manage their debts before temporary financial stress develops into prolonged delinquency, while also reducing their reliance on repeated borrowing.
Simply restructuring existing debt and extending new loans may provide short-term relief, but it does little to address the underlying income and spending pressures driving borrowers back into debt.
