Personal Rehabilitation Requirements and Debt Repayment: Eligibility Explained

Personal rehabilitation (gaein hoesaeng) is a system in which an individual with a steady income has debts they cannot manage adjusted with the help of the court. It is not a system for postponing debt but a procedure in which the court intervenes to adjust debts, and if you repay faithfully for a set period, the remaining debt is discharged. We have summarized the concept of personal rehabilitation, how debts are repaid and the requirements for filing, in that order.

What kind of system is personal rehabilitation?

Personal rehabilitation is a system in which an individual debtor with continuing income who has fallen, or is at risk of falling, into insolvency because of excessive debt applies to the court to have the debts adjusted. There are three key points.

• It is not a system in which you repay all debts at once.
• You repay only part of the debt over three to five years according to a repayment plan set by the court.
• Once repayment is complete, the remaining debt is in principle discharged.

In a word, it is a system that lets you repay only as much as you can, over a period set by law, and then make a fresh start.

How debt repayment works

Debts subject to adjustment

In personal rehabilitation, most debts are subject to adjustment.

• Debts to financial institutions such as banks, card companies and capital companies
• Private loans and debts to lending businesses
• Guarantee debts
• Some taxes and public charges, depending on the type
• Phone bills and medical bills

However, fines, administrative fines and damages arising from intentional unlawful acts are excluded from discharge.

Disposable income determines the repayment

The most important concept in how debts are repaid is disposable income. Disposable income is the amount left after deducting minimum living expenses and essential expenditures from monthly income.

The court considers the debtor's income, number of family members, housing costs and medical costs together to determine how much can be repaid each month. Paying that set amount equally every month is how debts are repaid in personal rehabilitation.

Repayment period

The principle is three years, that is, 36 months. If there are exceptional reasons, it can be extended to a maximum of five years, or 60 months. If you faithfully follow the repayment plan during this period, the remaining debt is extinguished by the court's discharge decision.

Protection during the repayment period

Once personal rehabilitation commences, creditors' demands, seizures and collection stop. Seizures of wages or bank accounts are also suspended, and pending lawsuits are halted. This means that during the repayment period you can escape the daily pressure caused by debt and stabilize your life.

Four requirements for filing for personal rehabilitation

Personal rehabilitation is not a system anyone can apply for; you must meet the requirements set by law.

The most important requirement is income. Whether you have income from which to repay in the future is at the center of the personal rehabilitation assessment.

If you exceed the debt amount limits, you should consider personal bankruptcy or another procedure rather than personal rehabilitation.

A risk of insolvency is likely to be recognized when debts are excessive relative to income, when you cannot even pay the interest properly, or when you repeatedly juggle card payments or take out loans to repay loans. Even if you are not yet delinquent, you can file if there is a risk of insolvency.

Because personal rehabilitation is a system for adjusting debts, your debts must exceed your assets. If you have too many assets, a procedure other than personal rehabilitation will be considered.

Points to know before filing

• In personal rehabilitation, keeping to the repayment plan matters more than filing.
• If you fail to pay repayments partway through, the case may be discontinued.
• A drop in your credit rating is unavoidable, but it can recover once repayment is complete.
• Everyone's circumstances differ, so an individual review is essential.

Personal rehabilitation is not a trick to have debts forgiven but a system that helps you repay faithfully within the scope permitted by law and get back on your feet. Rather than putting it off out of vague fear, objectively review your income and debt structure and check whether you meet the requirements for personal rehabilitation.

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Last reviewed: 2026-10-19 This article provides general legal information; specific advice is given through consultation.