 |
| Getty Images Bank |
By Lee Suh-yoon
The average household in Seoul is over 52 million won ($44,000) in debt, according to 2018 survey data from the Seoul Institute.
The institute examined the financial situations of 1,000 citizens over the age of 19 from April to May last year and calculated the average debt level to be 52.6 million won.
The average amount went up to 77.6 million won if including only indebted people, who accounted for 678 of the 1,000.
Some 35 percent of the respondents said the main cause of their debt was housing, while another 25 percent cited general living expenses.
More than 62 percent of them said they felt weighed down by the financial burden of repaying principal and interest on loans, while only about 10 percent said they do not.
Household debt has been climbing at an annual average of 7 percent nationwide since the early 2000s.
In many cases, it was low-income residents without any surplus emergency funds who have slipped into a slow spiral of debt. The trigger that set off this spiral included dismissal from work, a sick family member or a business failure. Even if the person managed to find a stable source of income later on, it was rarely enough to do much more than repaying interest ― leading to even more borrowing when the need arose, according to Seoul Welfare Foundation.
The financial counseling center at Seoul Welfare Foundation provides one-on-one consultation services for residents stuck in such debt cycles. Of the 32,786 visitors since its opening in July 2013, over 5,600 filed for bankruptcy or had their debts canceled in court rulings.
