Method of determining whether an individual debtor, who is in excess of his/her liability, is in insolvency status that is the cause of bankruptcy

Article 305(1) of the Debtor Rehabilitation and Bankruptcy Act

Supreme Court Order 99Ma2084 Dated August 16, 1999 (Gong1999Ha, 2156) Supreme Court Order 2008Ma1904, 1905 Dated May 28, 2009 (Gong2009Ha, 1007) Supreme Court Order 2009Ma1205, 1206 Dated September 11, 2009

Re-appellant

Subu District Court Order 2008Ra263 dated May 7, 2010

The order of the court below shall be reversed, and the case shall be remanded to the Panel Division of Suwon District Court.

The grounds of reappeal are examined.

1. Article 305(1) of the Debtor Rehabilitation and Bankruptcy Act (hereinafter “the Act”) provides that “if a debtor is unable to pay, the court shall, upon application, declare bankruptcy by its ruling.” In this context, the term “if the debtor is unable to pay” means “when the debtor is unable to pay,” that means an objective condition in which the debtor is unable to pay his/her debts generally and continuously due to lack of ability to repay (see Supreme Court Order 9Ma2084 delivered on August 16, 199).

Meanwhile, in order to determine whether a debtor is an individual, even if his/her liabilities exceed his/her current assets are more than his/her current assets, it is necessary to calculate the future income that can be specifically obtained by the debtor in consideration of the debtor's age, occupation and career, qualifications, skills, labor ability, etc., and then calculates the future income by deducting the living expenses that the debtor has to pay from such future income, etc., and then, it is necessary to evaluate that the debtor is in an objective state where the debtor can continuously repay most of his/her obligations with his/her assets and available income. As can be seen, without going through a specific and objective evaluation process on the debtor's ability to repay debts in excess of his/her liabilities, it cannot be concluded that the debtor is not in the state of insolvency without permission on the basis of the abstract and subjective circumstances such as the debtor's age, occupation and career, qualifications, or ability to pay some debts (see Supreme Court Order 2009Ma1205, Sept. 11, 2009).

2. According to the reasoning of the order of the court below, it is difficult for the court below to find that the non-party 1 and non-party 2 were the non-party 1 and non-party 3's non-party 1 and non-party 2's non-party 1's non-party 1's non-party 1's non-party 1's non-party 2's non-party 1's non-party 1's non-party 2's non-party 3's non-party 1's non-party 1's non-party 2's non-party 3's non-party 1's non-party 1's non-party 2's non-party 1's non-party 3's non-party 1's non-party 1's non-party 2's non-party 1's non-party 3's non-party 1's non-party 2's non-party 3's non-party 1's non-party 2's non-party 1'.

3. However, we cannot agree with the above judgment of the court below.

A. First of all, the court below determined that the Re-Appellant was unable to vindicate the cause of bankruptcy due to the circumstances such as the age, occupation, and career of the Re-Appellant, including the fact that the Re-Appellant was aged young and is currently engaged in import activities. However, according to the records, the court below did not examine the Re-Appellant's specific amount of future income in the future, whether the Re-Appellant, who is the debtor, can obtain future income, whether he/she should pay a certain amount of living cost to maintain his/her livelihood, and the amount of available income used as a repayment resource. Accordingly, it did not examine the Re-Appellant's specific and objective amount of available income.

Examining the above circumstances in light of the above legal principles, it cannot be concluded that the re-appellant is not in insolvency due to abstract and subjective circumstances, such as the fact that the re-appellant is young and has labor ability and is currently engaged in import activities, without going through specific and objective evaluations on future income, living cost, and scale of household income.

B. Furthermore, the court below examined the Re-Appellant's other circumstances cited as the ground that the Re-Appellant does not have any cause of bankruptcy.

(1) The court below held that the Re-Appellant bears the obligation under the name of the Re-Appellant for the purpose of housing purchase fund and living expenses, etc., and therefore, the debt is not in insolvency status on the ground that the Re-Appellant and the non-Appellant 1 jointly bear the obligation. However, even if the debt borne by the Re-Appellant is an obligation to be jointly borne by the formation of joint property of the married couple in the internal relationship between the Re-Appellant and the non-Appellant 1, the Re-Appellant cannot oppose the obligee for such reason. Further, according to the records, the non-Appellant 1 bears the obligation in excess of 30 million won (record No. 69, etc.) and the non-Appellant 1, and there is no evidence to view that the non-Appellant 1 bears the obligation in excess of 30 million won (record No. 69, etc.) and the non-Appellant 1 has the sufficient ability to repay. Accordingly, the above facts cited by the court

(2) The court below held that the non-applicant 1 was the revenue of KRW 3.25 million per month, and the re-appellant was engaged in income activities by engaging in the business of delivering learning paper while married, but the re-appellant did not comply with the order of the court of first instance to submit financial data related to the cash flow of KRW 85 million of deposit money for the third apartment house regardless of the above Howon or the third apartment house, and the re-appellant does not seem to be in the status of insolvency.

However, according to the records, non-applicant 1's wages amounted to 3.2.5 million won per month in the income tax withholding certificate (record No. 72) of non-applicant 1, the non-applicant 1's wages amounted to 3.2 million won per month. However, non-applicant 1's wages amount actually received from the company were deducted due to the repayment of funds borrowed from the above company, etc. (record No. 23, 73, 78-80, etc.). Meanwhile, according to the correction submitted by the non-applicant 1 from the first instance court to July 3, 2008, the non-applicant 3 apartment is leased to the company and supported by the above company in consideration of the situation that the non-applicant 1's family members are difficult, the non-applicant 1 and the non-applicant 1 and the non-appellant 3 apartment 1 and the non-appellant 1 and the non-appellant 1 and the non-appellant 1 and the non-appellant 1 and the non-appellant 1 and the non-appellant 1 and the non-party 31 and the non-party 1 and the non-party 3 were 1 and the non-party 1.

Therefore, it is obvious that the re-appellant cannot be deemed to have failed to comply with the order of the first instance court's correction, so the lower court erred in determining that the re-appellant was not in the insolvency status for the above reasons.

(3) On March 31, 2009, the court below cited the grounds that the Re-Appellant's payment of communication charges imposed in the name of non-applicant 1 in the account used by the Re-Appellant after the Re-Appellant's non-applicant's non-applicant 1, and the amount of money deposited from the non-applicant 1 was not found. However, it is hard to believe that the Re-Appellant's payment of child support 200,000 won was transferred to non-applicant 1, and it is difficult to view that the non-applicant was actually separated from the non-applicant 1, and that it is difficult for the Re-Appellant to view that the body of the married couple's common life was completely damaged.

According to the records, it is difficult to conclude that the Re-Appellant and the non-applicant 1's communal living body did not go against the re-Appellant and the non-applicant 1's co-living body were paid in several times due to communications charges imposed in the name of the non-applicant 1, and the amount of money deposited in several times from the non-applicant 1. However, the Re-Appellant appears to live in the non-applicant 1 and the non-applicant 1 after the divorce, and the non-applicant is living in the non-applicant 1 and the non-applicant 1's residence in the non-applicant 1 and the non-applicant 1 for the non-applicant 1 as a part of the expenses for providing children's meals, etc., and it is difficult to conclude that the above circumstance alone does not lead to the non-applicant and the non-applicant 1's co-living body not to go against the non-applicant 1's ability to pay the full amount of money in this case where there is no material to deem the non-applicant 1's self-reliance ability.

C. Ultimately, the circumstances cited by the court below appear to be difficult to readily conclude that the re-appellant is not in the status of insolvency. Accordingly, as seen above, the court below erred by misapprehending the legal principles on the cause of bankruptcy stipulated in Article 305(1) of the Act in the judgment below holding that the re-appellant is not in the status of insolvency without going through a specific and objective evaluation on the future income, living cost, and scale of available income.

4. Conclusion

Therefore, the order of the court below is reversed, and the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Hong-hoon (Presiding Justice)