Writing off financial debts does not erase unpaid national and local taxes, leaving a burden that can block vulnerable borrowers from getting back on their feet, a Korean research institute said. With the government weighing a plan to buy delinquent loans directly, the institute argued that Korea needs an integrated debt restructuring framework that also covers public obligations.
In a policy paper titled “The Limits of the Bulk Purchase Policy for Delinquent Loans and Policy Proposals for Substantive Rehabilitation Support,” the Korea Inclusive Finance Institute said on the 19th that lawmakers should create a legal basis for including public debts such as national and local taxes in debt restructuring and…