In a case where a debtor has completed the repayment according to the repayment plan that is finalized in the individual rehabilitation procedure, whether the individual rehabilitation creditor can contest the illegality of the decision to authorize the repayment plan that has already been finalized in the subsequent discharge judgment (negative), and whether the same applies to the case of a repayment plan that is modified according to the decision to authorize the repayment plan (affirmative)

Articles 13(2), 618(1), 619(1), 624(1), and 627 of the Debtor Rehabilitation and Bankruptcy Act

Korea Light Asset Management Loan Co., Ltd.

Seoul Council Order 2018Ra101706 dated November 12, 2018

The reappeal is dismissed.

The grounds of reappeal are examined.

1. In the individual rehabilitation procedure under the Debtor Rehabilitation and Bankruptcy Act (hereinafter “ Debtor Rehabilitation Act”), when the debtor has completed repayment according to the repayment plan, the court shall, at the request of the relevant party or ex officio, decide to grant immunity (Article 624(1) of the Debtor Rehabilitation Act). It means that the debtor is entitled to immunity if the repayment is completed according to the repayment plan that became final and conclusive after a decision to authorize the repayment plan is over the extended period of time becomes final and conclusive. Therefore, as long as the repayment is completed according to the finalized repayment plan, any individual rehabilitation creditor cannot contest the illegality of the decision to authorize the repayment plan at the subsequent final and conclusive judgment. The same applies to a change in the repayment plan that is amended by the decision to authorize the repayment

However, the court may decide not to grant immunity if there exist grounds for refusing to grant immunity, such as where the debtor fails to perform his/her obligations under the Debtor Rehabilitation Act (Article 624(3)2 of the Debtor Rehabilitation Act).

2. According to the record, the following facts are revealed.

A. On August 26, 2014, the debtor obtained authorization of the repayment plan (for 60 months from May 19, 2014 to April 19, 2019) and submitted a draft change of the repayment plan to the effect that the repayment period is reduced to 46 months on January 29, 2018. On May 31, 2018, the first instance court decided to authorize the change of the repayment plan to the above change, and announced the main text of the above decision and the summary of the reasons on the same day. The decision to authorize the change of the repayment plan was finalized on June 15, 2018 as the upper limit of the period of immediate appeal.

B. Meanwhile, on the other hand, the debtor filed an application for immunity on the ground of the completion of repayment according to the changed repayment plan on June 5, 2018, and the first instance court accepted it on July 25, 2018 and decided to grant immunity to the debtor. The re-appellant filed an immediate appeal against the aforementioned immunity decision on the ground that the decision to approve the repayment plan did not meet the requirements for authorization under the Debtor Rehabilitation Act, and the lower court dismissed the re-appellant's appeal on November 12, 2018.

3. Examining these factual relations in light of the legal principles as seen earlier, the allegation in the grounds of re-appeal that there exists an illegal cause in the decision to authorize the change of the repayment plan cannot be a justifiable ground for disputing immunity for the debtor who has completed the repayment according to the changed repayment plan. The lower court did not err by misapprehending the legal doctrine as the grounds of re-appeal

4. Therefore, the reappeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kwon Soon-il (Presiding Justice)