The Seoul Bankruptcy Court has recently issued a bankruptcy declaration for Haru Management Limited, the company associated with Haru Invest, which abruptly suspended virtual asset withdrawals in June 2023. This case (2024Hahap100259) has significant implications for creditors, many of whom are foreign nationals, as they must now file their claims to secure their rights during the bankruptcy process.
The Seoul Bankruptcy Court recently issued a bankruptcy declaration for Delio, a South Korean virtual asset deposit platform. This case (2024Hahap100231) carries substantial implications for creditors, including a significant number of foreign nationals, who are now required to file their claims to protect their rights during the bankruptcy proceedings.
If you are dealing with unpaid receivables from a Korean company or individual, recovering these debts can be challenging. Often, Korean counterparts may ignore communication, delay payments, or cite unacceptable reasons for non-payment. Some may even rely on the assumption that the geographical distance, legal system differences, and language barriers make it difficult for foreign creditors to pursue debt recovery in South Korea.
This is when hiring an experienced Korean debt collection attorney becomes essential. A knowledgeable Korean business and litigation lawyer can guide you through the debt collection process under Korean law, from initial steps to enforcing claims.
In this article, our Korean lawyer explains the essential legal steps that foreign creditors can take to recover debts or unpaid receivables effectively.
Let’s assume a creditor has a monetary claim against a debtor in Korea but the debtor refuses to pay it. The creditor would proceed to file a lawsuit to get a judgment to collect his claim. Unfortunately, however, the chances are that knowing the complaint was filed, the debtor would try to conceal or transfer his assets to evade from the liability under judgment. This shows why provisional attachment is highly required to secure the judgment effectively.
Read More: Korean Lawyer Explains Debt Collections In South Korea – Overview
Provisional attachment is a judicial measure available to anyone who has a monetary claim to lock down certain assets. It, depending on the type of court order, prevents the debtor from selling assets or enables the creditor to secure his interest in the debtor’s asset regardless of the sale by the debtor, until the court issues a judgment on the merit.
The creditor can, and usually does, seek a provisional remedy before she files a complaint on the merit. So, this is a very powerful weapon for the creditor. For example, as many Korean creditors do, if the creditor succeeds in putting a provisional attachment on the debtor’s bank account, the debtor would not be able to use the money and could face several penalties regarding its banking/financing transactions with the bank. This could heavily deteriorate the ability for a small company to conduct business, which makes the debtor (more…)