Collecting a Debt in Korea: Payment Orders are your Friends

We receive many emails concerning our collection services and this answer is an answer that I give for most collections matters involving debts with debtors that appear solvent.

1. Obtain a Payment Order & Send a Demand Letter (지급명령) 
A Payment Order Complaint is filed to the court and this complaint, if accepted by the court, is served on the debtor-defendant.  If the complaint is not answered in 14 days by the defendant the case is finalized and this finalized judgment can be executed.  If you are savvy, speak Korean and have some understanding of law, a payment order can be filed without an attorney.  However, for any substantial debt, of course, hire an attorney. 

In many cases it is advisable to ascertain the response of the defendant and put a little fear into the defendant without engaging in a court procedure by sending a Demand Letter.  We find this to be the case when a plaintiff intends to continue business with the defendant or we have an indication that the defendant is in bankruptcy rehabilitation proceedings. 

2. Execute the Finalized Judgment
The execution procedure is filed to a court and, in many cases, it is advisable to retain the services of an asset check company.   Korean courts allow the seizure of most types of assets. 

3.  Consider Filing a Criminal Complaint
If the matter is, obviously, an indication of fraud your attorney should consider filing a criminal complaint.  The reality is that those that are involved in a fraud are not likely to have discoverable assets.  A good attorney can get a prosecutor, in many cases, to shake money out of a defendant.

We find, in most cases, it is not advisable to even send a demand letter, since this, often is simply delaying the inevitable – Payment Order.  If the Payment Order is contested by the defendant, the case will proceed to a normal trial procedure.  

Other articles that may be of interest to the reader:
Debt Collection in Korea: Foreign Creditor vs. Korean Company
Number of Debtors in Korea on the Rise
Garnishing Wages in Korea
Debt Collection Agencies in Korea
Sean Hayes may be contacted at:

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. Sean is ranked, for Korea, as one of only two non-Korean lawyers as a Top Attorney by AsiaLaw.

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