Khanh Kiet at the age of 20

KoreaBorrowing to invest in stocks, cryptocurrencies or real estate has led many people in their 20s and 30s to file for bankruptcy protection.

In the first half of the year, Korea recorded 245 individual bankruptcies. That number spiked to 322 and 315 in July and August respectively, representing 19.6% of total bankruptcy filings.

According to statistics of the Seoul bankruptcy court, one in five people who file for bankruptcy will be in their 20s, or 1-2 more if the age of 30 is added. In 2020, people under 30 years old declare Bankruptcy accounts for only 10% but now doubles after a year and a half.

The main reason is believed to be the tendency of young people to borrow to buy stocks or virtual currencies. Bankruptcy lawyers are reporting a sharp increase in the number of young Koreans caught up in the Bitcoin craze. “I used to be a hard-working salaried employee, but I’m heavily in debt as investments evaporate,” said an office worker in her 30s who borrowed 25 million won in credit cards to invest. into electronic money.

“Most of the people in their 20s who went bankrupt last year were related to credit card defaults, but recently about half of them have also lost crypto,” said Lee Seo-young at law firm A-Part said.

Unsecured loans with high interest rates to invest in risky fields such as stocks, virtual currencies … make young Koreans fall into debt and insolvency. Illustration: Maeil Business Korea

But this is just the tip of the iceberg. When apartment prices skyrocketed last year, many young people rushed to take out huge loans to buy houses for fear the market would go even higher. But interest rates skyrocketed while property values ​​fell, leaving many homeowners in a difficult position.

According to the Financial Services Commission, the debt amount of people in their 20s and 30s in 10 real estate brokerage firms increased from 1.9 trillion won at the end of June 2020 to 3.6 trillion won after one year. This means that the number of young people borrowing money has almost doubled in the past year. They are also the group that makes up 55% of all crypto investors.

Professor Oh Jung-keun of Konkuk University said that because young people do not own many assets, young people tend to invest in high-risk investments in the hope of quickly changing their lives. “The increase in the number of young people filing for bankruptcy protection shows that many people have fallen into debt due to usury to invest,” said Oh, adding that more and more people are borrowing from at least two sources. difference.

Statistics from the Financial Supervisory Service show that by the first half of this year, there were nearly 400,000 people borrowing money from many parties, an increase of more than 30% compared to the end of 2019 and identified as the strongest growth among all financial institutions. age group.

At the end of April, the Korean Institute of Finance reported that people under 30 who borrowed more than one source owed a total of 158 trillion won, up 33 percent from 2017. These people are classified as highly likely to default. .

Park Hyun-keun, from the Korea Bankruptcy Lawyers Association, said that while borrowing rates are expected to continue to increase at the present time, cryptocurrencies and stocks continue to depreciate. “This means that the financial condition of investors is getting worse and worse. Anyone can see that the number of young people going to the Seoul Bankruptcy Court will increase,” Mr. Park said.

Minh Phuong (According to Chosun)


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