Rising living costs, debt fuel mental health crisis among Seoul’s youth

An infographic of the financial status of young Seoulites / Courtesy of Seoul Metropolitan Government

A deepening debt crisis among young Koreans has evolved into a dire mental health emergency, with around 40 percent of those petitioning for court-ordered debt relief reporting suicidal urges over the past year, according to a report released Tuesday.

The study, conducted by the Seoul Financial Welfare Counseling Center, surveyed 1,025 people under the age of 30 who are currently navigating the city’s bankruptcy court system. The findings offer a bleak window into the lives of a generation for whom the vicious circle of debt is increasingly driven not by reckless speculation, but by the basic cost of living.

While popular narratives in Korea often blame youth debt on luxury spending or volatile crypto investments, the survey suggests a far more systemic collapse. Nearly 68 percent of respondents cited everyday living expenses as the primary spark for their debt. Furthermore, the share of those burdened by supporting family members or falling victim to fraud rose significantly over the last year.

The economic floor has fallen out for many.

More than half of the debtors attributed their financial ruin to job losses or income disruptions — a staggering leap from 31 percent the previous year. Business failures among young Koreans also more than doubled, jumping from 11.9 percent to 28.1 percent. With an average monthly take-home pay of just 2.32 million won ($1,600) and nearly 40 percent of the cohort reporting periods of total unemployment, financial survival has become nearly impossible.

The psychological fallout is perhaps the most alarming metric.

The 40.6 percent who reported suicidal thoughts reflects a population pushed to the brink. For these individuals, the average debt load of 69.26 million won represents a lifelong sentence rather than a temporary setback.

The center, which operates a "Youth Companion" program to guide debtors through the legal thicket of the Seoul Bankruptcy Court, has served over 6,400 residents since 2021. However, officials noted that as the link between employment instability and insolvency tightens, financial literacy alone may not be enough. The surveyed youth increasingly identified direct living subsidies and psychological intervention as their most urgent needs, suggesting that for Seoul’s youngest debtors, the court’s "rehabilitation" process is only the first step in a much longer recovery.

If someone you know exhibits warning signs of suicide, contact Korea's Suicide Crisis hotline at 109. For foreign language assistance to connect with mental health professionals, call Danuri Portal's helpline at 1577-1366.

This article was published with the assistance of generative AI and edited by The Korea Times.