The rise of youth debt in South Korea is becoming a concerning issue, with many young people turning to crypto investments and stock market purchases that are leading them to bankruptcy courts. According to a report released by the Seoul Rehabilitation Court, there has been a 31% increase in “personal rehabilitation” applications in the Financial Year 2023, driven by crypto investments among individuals aged 20-29. The court’s annual report showed that 19,379 individuals applied for rehabilitation or bankruptcy in FY2022, up from 14,826 in FY2022. The rehabilitation system in South Korea allows individuals to avoid legal bankruptcy by adhering to court-assigned debt repayment plans.
The trend of rising personal rehabilitation applications among young people in their 20s has been steadily increasing over the years. In the first half of 2021, 10.3% of rehabilitation applicants were aged 20-29, with the number increasing to 17% in the second half of 2023. The court attributed this rise to the expansion of economic activities for young adults, including cryptocurrency and stock market investments. Some financial advisors believe that young South Koreans see crypto and overseas stock markets as their only financial hope, particularly due to high property prices and unemployment rates in the country.
Judge Lee Seok-jun of the Seoul Bankruptcy Court has called for more regulation in the crypto industry to protect investors, as courts often lack the power to provide adequate protection due to legislative oversights. The court’s analysis has highlighted a correlation between the rise in insolvency among young people and their involvement in economic activities such as crypto investments and stock market trading. This trend is concerning as it indicates that many young South Koreans are taking financial risks in hopes of securing their future, but are ultimately ending up in bankruptcy courts due to their investments.
The rising disillusionment among South Korean youth is partly attributed to high property prices and unemployment rates, forcing many to seek alternative financial opportunities such as crypto investments and stock trading. The increasing popularity of crypto investments among young people has led to a surge in personal rehabilitation applications, with a significant percentage of applicants falling in the 20-29 age group. Financial advisors are encouraging young South Koreans to consider crypto investments as essential for their financial future, despite the risks involved. As the number of young people turning to crypto investments continues to rise, there is a growing need for regulatory measures to protect investors and prevent further financial distress among the youth.
Overall, the data from the Seoul Bankruptcy Court highlights the growing trend of youth debt in South Korea, fueled by crypto investments and stock market purchases. The increase in personal rehabilitation applications among young adults underscores the financial challenges that many are facing in the country, with high property prices and unemployment rates contributing to their financial struggles. The call for more regulation in the crypto industry and the recognition of legislative oversights by the courts point to a pressing need for measures to protect investors and prevent further bankruptcies among the youth. As young South Koreans continue to turn to risky investments in search of financial security, it is essential to address the root causes of youth debt and provide them with the necessary support and guidance to make informed financial decisions.
