1. The defendant's appeal is dismissed.

2. The costs of appeal shall be borne by the Defendant.

Purport of claim and appeal

1..

1. Basic facts

A. On August 1, 2003, the Plaintiff loaned 5,300,000 won to the Defendant as “credit card substitution theory” by setting the lending period of 60 months.

(hereinafter “instant loan”). Article 25 (Loss of Effect) (1) An agreement on debt settlement has been concluded, but the Commission shall ex officio lose the validity of debt settlement in any of the following cases, and notify the credit financial company thereof:

1. When the debtor fails to implement the repayment plan according to the debt settlement for not less than three months without any special circumstances: Provided, That with respect to anyone who has performed faithfully in accordance with the repayment plan for not less than 12 months, the Committee may determine the period differently;

2. Where special grounds arise that prevent the debtor from implementing the repayment plan.

3. Where the materials or statements submitted by the debtor when he/she files an application for debt settlement are found to be false;

4. Where it is found that the debtor has reported false facts, escaped and concealed his/her property, or reduced his/her responsible property, etc. in the course of implementing the repayment plan.

5. Other cases where the Review Committee has passed a resolution that loses the validity of debt settlement at the request of a debtor or a credit financial company.

B. Under Article 75(1) of the Microfinance Support Act, the Plaintiff received reimbursement in accordance with the procedure for recovery of credit regarding the instant loan. As the Defendant delayed repayment as determined in the procedure for recovery of credit, the Credit Counseling and Recovery Service lost the validity of debt settlement in accordance with the provisions of the Credit Counseling and Recovery Support Agreement as below, and notified the Plaintiff thereof.

C. As of April 16, 2018, the sum of the principal and interest of the instant loans as of April 16, 2018 is KRW 14,311,377 (i.e., the outstanding principal at KRW 3,785,987 overdue interest at KRW 10,525,390).