South Korea is rolling out a new type of bank account designed to shield a basic level of income from creditors, a policy change aimed at protecting vulnerable citizens from aggressive debt collection. The accounts, often referred to as “생계비 압류 금지” (literally, “livelihood expense levy prohibition”) accounts, are now being offered by financial institutions across the country, following a revision of the Civil Execution Act that took effect February 1, 2026.
The core principle behind these accounts is to safeguard funds essential for basic living expenses. While protections for a month’s worth of living expenses existed prior to the recent changes – up to 1.85 million Korean won – the new regulations aim to strengthen those protections and improve accessibility. The revised law, passed on January 31, 2025 (Law No. 20733), addresses concerns about creditors gaining access to a debtor’s full financial picture, potentially leaving individuals without the means to cover essential needs. The new accounts allow individuals to designate a specific account where up to 2.5 million Korean won per month is protected from seizure.
What is the ‘생계비 압류 금지’ Account?
The “생계비 압류 금지” account, or livelihood expense protection account, is a specialized deposit account available to individuals in South Korea. It’s designed to prevent creditors from seizing funds necessary for basic living. As reported by the Chosun Ilbo, the monthly limit for protected funds has been increased to 2.5 million won, a significant rise from the previous 1.85 million won limit. Each individual is limited to opening only one such account across all financial institutions.
Shinhan Bank, along with other financial institutions, including the Shinhyup Central Cooperative, has already launched its version of the account. Shinhyup’s ‘생계비통장’, for example, is available to all individual customers and can be opened at any Shinhyup branch. The account’s monthly deposit limit and balance cap are both set at 2.5 million won, ensuring that funds within that threshold are shielded from legal claims.
How Does it Work and Who is Eligible?
The mechanics of the account are relatively straightforward. Individuals can open a ‘생계비 압류 금지’ account at most banks and credit unions in South Korea. Deposits up to 2.5 million won each month are then legally protected from being seized to satisfy debts. This protection applies to both the monthly deposits and the account balance, up to that 2.5 million won limit.
Eligibility is open to all individual customers. There are no specific income requirements or restrictions, making it accessible to a broad range of citizens facing financial hardship or seeking to proactively protect their essential funds. The accounts are intended to provide a safety net, preventing individuals from falling into deeper financial distress due to aggressive debt recovery practices.
The Legal Framework and Recent Changes
The introduction of these accounts is a direct result of amendments to the Civil Execution Act. According to the Ministry of Justice’s announcement, the changes were enacted to more effectively guarantee a minimum level of livelihood for debtors. Prior to the revision, while some protection for basic living expenses existed, the process for creditors to access a debtor’s financial information often led to the seizure of funds needed for essential needs.
The new regulations aim to address this imbalance by creating a designated account specifically shielded from seizure. This provides a clearer and more robust protection for individuals struggling with debt, ensuring they can maintain a basic standard of living. The implementation of the new rules follows a period of public discussion and debate regarding the fairness and effectiveness of debt collection practices in South Korea.
Impact on Creditors and the Financial System
While the primary goal of the ‘생계비 압류 금지’ accounts is to protect debtors, the changes also have implications for creditors. The limitations on seizure may potentially slow down the debt recovery process in some cases. However, proponents of the policy argue that it encourages more responsible lending practices and promotes a more equitable balance between the rights of debtors and creditors.
Financial institutions have adapted to the new regulations by developing and launching these specialized accounts. They are required to clearly identify and protect funds deposited into these accounts, ensuring compliance with the Civil Execution Act. The widespread availability of these accounts across various banks and credit unions demonstrates the industry’s commitment to implementing the policy changes effectively.
The introduction of the ‘생계비 압류 금지’ accounts represents a significant step towards strengthening financial protections for vulnerable citizens in South Korea. The policy aims to provide a safety net, ensuring individuals can maintain a basic standard of living even while managing debt. The next key date to watch is the ongoing monitoring of the account’s impact on debt recovery rates and overall financial stability, which will likely be assessed by the Ministry of Justice in the latter half of 2026.
Have your say: What are your thoughts on this new financial protection measure? Share your comments below and let us know how you think this will impact individuals and the financial system.
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