Unified Insolvency Law of Korea

Abstract

The draft of new insolvency law is now under review by the Legislation and Judiciary Committee within the National Assembly prior to being submitted to the main meeting of the National Assembly.

The draft of the new insolvency law is consisted of six (6) chapters. The first chapter provides for the general provisions such as the jurisdiction, public notice and service, registration, management committee, creditors committee, etc. The second chapter provides for the new rehabilitation proceeding,

which is based on the current corporate reorganization procedure. The third chapter modifies the current procedures pursuant to the Bankruptcy Act. The individual rehabilitation proceeding and international insolvency proceeding are newly inserted in the fourth and fifth chapters. The sixth chapter provides for the penalty. As seen from these chapters, the characteristics of the draft are that: (a) all insolvency procedures are provided for under one piece of legislation; (b) the rehabilitation proceedings will become one proceeding in the second chapter; and (c) the new chapters for individual rehabilitation proceeding and international insolvency proceeding are newly established. If the draft is passed by the National Assembly, the new insolvency law is expected to be effective within one (1) year.