"The law clearly says they can't garnish the first $1.85 million, so why are they stopping me from spending my money?"

this is the story of Mr. Kim Cheol-soo (a pseudonym), whose 2 million won deposited on payday was garnished the next day. he had to pay for his children's school fees and living expenses right away, so he complained to the bank, but was met with a cold response: "You need to file a 'request to change the scope of the anti-foreclosure bond' with the court and get a decision."

without any legal knowledge, Kim had to spend 1-2 months on the road before she could file the paperwork with the court, get the decision, and submit it back to the bank. If you can't find your "living expenses," which means money to live on tomorrow, until two months later, can you really call it "protection"?

in 2026, the unreasonable deposit garnishment prevention process that has sent debtors into a double whammy will finally change. that's because the "living expense account" system will be implemented.

"Two months to find $1.85 million of my money" - the tears of the current anti-garnishment system

currently, the Civil Enforcement Act prohibits the seizure of up to 1.85 million won per month in personal savings. however, this system has been criticized as a "but-for" provision.

banks are not aware of the debtor's entire deposit situation or the nature of the money deposited (salary or business funds). Therefore, when a creditor's garnishment order is received, the bank will first stop payment (seize) the entire account to avoid liability.

in the end, the debtor, who was entitled to the protection of 1.85 million won, had to prove to the court that "this money is my livelihood, please release the garnishment" through a complicated legal process called "application for change of scope of anti-garnishment bond." This process took at least 1-2 months, during which time the debtor and his family suffered a complete loss of livelihood.

february 2026, the "living expense account" changes everything

effective February 1, 2026, "living expense accounts" fundamentally resolve this "post-petition foreclosure" contradiction.

a living expense account is aone-person, one-account designated by the debtor that is a powerful garnishment-proof account that "ex ante"prevents garnishment of any money deposited into it, up to alimit of $250 per month.

you'll never have to run through the courts again to find your living expenses again.

how exactly does the $250 monthly protection work?

the new scheme is more than just an increase in protection from 1.85 to 2.5 million won.

the key point is that itprotects an 'aggregate amount' of 250 million won per monthbased on a 'person' rather than an 'account'.

for example, let's say you opened a 'living expense account' at Bank A (with a balance of 0 won) and accidentally received a monthly salary of 300,000 won from Bank B's 'general account'. under the current law, Bank B would seize the entire amount of KRW 300,000, but this will change in 2026.

the garnishment system will see in real-time that the balance in your living expenses account is 0 won and realize that you still have 2.5 million won in protection, so 2.5 million won of the 3 million won in Bank B's general account will be automatically prohibited from being garnished, and only 500,000 won will be garnished.

this means that no matter which account the debtor receives the money from, the minimum livelihood protection limit (2.5 million won) is immediately guaranteed.

where and how do I open one?

  • effective date: February 1, 2026

  • who canopen: Anyone in the country (regardless of credit or income)

  • opening method: 1 account per person

  • institutions: Any financial institution in Korea , including commercial banks, regional banks, savings banks, mutual financial institutions (such as cooperatives and credit unions), and post offices

upon receiving your request, the financial institution will check whether you have a living expense account at another financial institution through the computerized network of the credit bureaus and open one for you. this account can be used to make direct debits for things like utility bills and cell phone bills, so it can be used in real life.

it's not just about garnishment protection: increased insurance protection limits

in addition to protecting deposits from garnishment, we have also significantly increased the garnishment protection limit for life insurance policies to prevent unexpected events from jeopardizing the livelihoods of borrowers and their families.

this will apply to the first garnishment order case filed after the system is implemented.

  • guaranteed Death Benefit: Increased from KRW 10 million to KRW 15 million

  • maturity and surrender refunds: KRW 1. 5 million → KRW2.5 million

a living expense account doesn't eliminate debt

let's be clear about one thing. while it's a powerful "shield" to help you make ends meet each month, it's not a "weapon" to solve the root cause of debt collection and garnishment - the debt itself.

if you need to resolve your debt beyond garnishment protection, you should explore debtor protection options such as a court-ordered "Proposal" or a Credit Repair Council "Individual Workout.

frequently Asked Questions (FAQs) about the Living Expense Account

A1: Unfortunately, until February 1, 2026, you're stuck with the current system. You'll need to file a "Motion to Modify the Scope of the Garnishment Protection Bond" with your local court immediately. This process can take about 1-2 months.

Q2: Can only people with bad credit or basic needs open a living expense account?

A2: No. The Living Expense Account is a universal right that allows 'everyone' to open a single person account, regardless of credit status or income level.

Q3: I already have a 1/2 wage garnishment ban, what's the difference?

A3: The 1/2 salary garnishment protection is also a legal right, but the moment this money is deposited into the passbook, it becomes a 'deposit' and is not automatically protected by the bank. In the end, we had the same problem of having to 'apply for a change in the scope of the garnishment protection' to retrieve this money. The crucial difference is that the living expense account eliminates this 'proof' process and 'automatically' protects up to 2.5 million won.

conclusion and call to action

the February 1, 2026 implementation of the Living Expense Account is the beginning of a strong social safety net that protects our right to live a minimally human life, even in debt.

we hope this information today provides a ray of hope for those suffering from debt foreclosure. if you have any more questions about living expense accounts or debt garnishment protection, please don't hesitate to leave a comment.

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