We receive emails, on nearly a daily basis, from companies and individuals attempting to collect a commercial debt in Korea. Many of these creditors are not aware that the debtor has filed for bankruptcy or is experiencing financial difficulties.
Please follow this basic advice and take a read of other others we wrote on this topic.
Before Engaging in a Relationship with a Korean Company:
1. Before engaging in any work or giving a Korea company money – please do a little due diligence. Many SMEs and even conglomerates (mainly construction companies) are experiencing serious financial difficulties. Do a little due diligence before wasting your time and money. If you find that the company is experiencing financial issues, the agreement should be tailored to reflect these realities.
2. Before continuing work with a company in Korea – please do a little due diligence. Many companies with no problems paying you in the past – might be experiencing problems now.
After Realizing you Got Yourself in Pickle:
1. Immediately send a formal demand letter from a Korean law firm. The demand letter may be answered with a bankruptcy/rehabilitation notification (mandated by law if company is in proceedings); and
2. Quickly ascertain if the company has any assets. Law firms can, typically, assist with discovering assets.
In all debt collection matters in Korea – it is necessary to act quick. Assets disappear quickly and the courts are very efficient in closing cases quickly. Act fast or you may be left with only an invoice.
Sean Hayes may be contacted at: [email protected] Sean Hayes is co-chair of the Korea Practice Team at IPG Legal. He is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty. He is ranked, for Korea, as one of only two non-Korean attorneys as a Top Attorney by AsiaLaw.
- Collecting a Debt in Korea: Payment Orders are your Friends
- Debt Collection Cases in Korea on the Rise: Buyers and Sellers Beware
- Provisional Attachments of Assets in Pending Litigation in Korea Courts
- Garnishing Wages in Korea: Collection of Debts in Korea
- Korea Contracts Don’t Forget the Counter-party: Due Diligence before Executing an Agreement in Korea
- Guide to Winding-Up/Permanetly Closing a Korea-based Company
- Credit Rating Agencies in Korea: Due Diligence of Your Supplier, Franchisee, Joint Venture Partner & Distributors
- Arrest/Attachment of Ships at Korean Ports: Maritime Liens in Korea
- Korea New Exchange (KONEX) Basics
- Piercing the Corporate Veil in Korea: Suing Shareholders of a Corporation