KBS Panorama 'Household Debt of 1,000 Trillion Won, Society that Recommends Debt' Household debt is approaching 1,000 trillion won. The average debt of households struggling with debt is 80 million won. This is truly a debt society. We study with debt, work with debt, buy houses with debt, and live. This is the story of all of us. Why did we end up in debt? Is this okay? The government has lowered the threshold for loans every time there is an economic crisis, and in a low-income, high-cost social structure where the debt growth rate is higher than the income growth rate, and in a weak social welfare system, individuals have been paying necessary expenses with debt. Experts are warning of a household debt crisis. ■ Excessive loans that led to disaster The Yongsan International Business District development area, Seobu Ichon-dong, Seoul, which was expected to emerge as an international city. The mega-project site that the production team visited was empty. When residents heard about the rising housing prices after redevelopment and the promised compensation, it seemed reasonable to take on debt right away. 'Just by living in Seobuichon-dong, you are already part of the top 1% of South Korea!' The rosy future depicted in the promotional materials that the residents had kept turned out to be nothing more than sweet talk. The city of Seoul's policy for the residents who were deeply in debt was to lower the threshold for loans. This is the current address of Seobuichon-dong, a neighborhood where people have been living on debt for 6 years, and as a result, the average debt per household has reached 360 million won. The excessive debt is piling up like faded bills... Is this okay? In 2008, when the real estate market was booming, Choi Ho-sang (pseudonym) received a new 57-pyeong apartment. Since his 'home' that he had purchased 10 years ago was a great collateral for raising necessary funds for business, he wanted to own a bigger house. At that time, when the real estate market was at its peak, construction companies would give apartments to those who brought in 5% of the selling price, or even 10 million won. Banks gave interim loans using houses that had not yet been built as collateral. However, real estate prices began to fall in 2008, and the construction company went bankrupt as if things were not going well. Mr. Choi Ho-sang (pseudonym) was left with debts that he had never even touched. In the end, the house that was collateral was auctioned off. ■ A life of loans that started to survive Mr. Lim Seung-yong, who ran a neighborhood mart in Jinju, Gyeongnam. When sales dropped due to the opening of large marts in the area, he chose a franchise mart as a breakthrough. He received a business loan to secure business funds, but as some of the loan repayments were overdue until the new mart was established, the mart income was seized and the house he had lived in for 17 years was auctioned off. Can small business owners do business without debt? Truck driver, Mr. Go Jeong-gi. He drives for 17 hours a day. In order to work, he has to buy imported cars and equipment worth hundreds of millions of won out of his own pocket. After 6-7 years of hard work, the car price is roughly paid off, but after that, the car becomes a 'money-eating hippopotamus' due to all sorts of repairs and aging. Then, when he buys a new car, he has to borrow money again. This is not all. A round trip from Incheon to Busan costs 500,000 won just for gas. It is impossible to drive without a credit card. Where did the life of loans go wrong, where you have to pay off your credit card bill and installment payments before living expenses? ■ Debt just by breathing As of 2013, 730,000 out of 3 million college students, or one in four, are receiving student loans. If you include those who use loan sharks, the loan amount increases even more. Lee Young-hoon, who decided to receive a full scholarship and earn living expenses through part-time jobs due to his family’s financial situation, entered a school with a lower level than his CSAT score. (pseudonym) However, after failing to receive a scholarship once, his life of loans began. He borrows tuition and living expenses, and works a part-time job worth 800,000 won per month to pay off the interest while continuing his studies. He cannot hide his gloomy expression at the thought that he is one of the potential credit delinquents reported in the news. College students who have become debtors before they even get a full-time job or earn money. A future predicted by a life of loans. College students, is this okay? Kim Soon-ja, a cleaning worker I met at a university. After her husband died, she belatedly entered the workforce and worked tirelessly for 10 years. However, her household finances were in the red. Kim Soon-ja received 4,900 won per hour for cleaning. Her monthly salary was 1.05 million won. It was not enough income to raise her college-age siblings. In parti