starting in February 2026, the Living Expense Account system will be introduced to protect up to 2.5 million won per month from garnishment. we summarized how to open a garnishment-free account, the increased insurance protection limit (death benefit of 15 million won), and the core contents of the debtor protection systemin a storytelling style.

living on the edge, why did we need a 'living expense account'? (The evolution of debtor protection)

helping debtors and their families suffering from debt to live a minimally decent life is an important responsibility of the state. debtor protection schemeshave existed in the past that prohibit garnishment of a certain amount of savings to give debtors a second chance, but they have been limited in providing real protection.

the existing deposit limit was 1,850,000 won per month, but this amount was based on the minimum cost of living in 2019, and many people argued that it did not reflect the current cost of living.

worse, even though they were legally protected by the KRW 1.85 million, they were not able to use the money immediately. because it was difficult for financial institutions to get an accurate picture of a debtor's entire bank balance, once a garnishment order was filed, all of the debtor's deposits were often frozen. The debtor then had to go through a complex and time-consuming "garnishment release process" with the court to get their living expenses back. this process was time-consuming, costly, and extremely emotionally distressing, greatly reducing the effectiveness of the debt garnishment prevention system: a cliffhanger situation where living expenses were tied up and immediate medical or food bills could not be paid.

to address this bureaucratic inefficiency and debtor distress, we introduced the Living Expense Account, which represents a paradigm shift to a "proactive preventive measure" that prevents living expenses from being garnished in the first place by proactively designating a legally protected garnishment-free account. this maximizes the "teeth" of debtor protection and ensures that livelihood funds are immediately available without the need for complex court battles.

in 2026, a realistic livelihood protection threshold of 2.5 million won per month

a key part of the amendments to the Civil Enforcement Act, which will come into effect in February 2026, is the introduction of garnishment-proof accountsand the realization of a realistic protection threshold. The existing garnishment-proof living expenses threshold of KRW 1.85 million will be increased to KRW 2.5 million per month.

this increase to 2.5 million won is more than just a reflection of inflation, it is also a measure to ensure legal equity. By matching the amount of protection (2.5 million won) to the amount of protection when personal deposits are seized for non-payment of national or local taxes, the legislative intention is to unify the legal protection standards for debtors in the areas of civil and public enforcement. this makes the standard of debtor livelihood protectiona reality and standardizes it.

the Ultimate Guide to a Living Expense Account: The Secrets and Protections of a One Person Account

a living expenseaccount is a specially designated account that gives you the freedom to spend your money without fear of garnishment, as long as you stay within the garnishment-free living expense limit. it's important to understand the specifics of how to open one and how it works in order to use it effectively.

when and where can I open a garnishment protection account?

the Living Expense Accountwill be available to all citizens starting in February 2026. the most important principle is that only one account can be opened per person.

the range of financial institutions that can open an account is very wide. you can open an accountat most financial institutions in Korea, including commercial and regional banks, savings banks, mutual financial institutions (credit unions, cooperatives, etc.), and post offices. the debtor must visit the financial institution of his/her choice and designate this account.

protecting $250 per month, understanding the 'offset protection method' (key details)

money depositedinto a living expense accountcannot be garnished up to a limit of $250 per month. The key detail is how the protection limit is calculated.

1. how offset protection works

let's say a debtor only has an amount of money in a living expense account thatdoes not exceed 2.5 million won, say 2 million won. under existing law, the debtor is entitled to a total of 2.5 million won in garnishment protection. If you have 2 million won in your living expense account, the remaining 500,000 won is protected from garnishment from the balance of your deposits in other general accounts (e.g., paycheckbook).

this is a strong safeguard designed to ensure that the debtor's legally guaranteed living expenses of KRW 250,000 are protected, even if the debtor doesn't keep money in a specific account.

2. limit on cumulative monthly deposits (to prevent abuse)

there is an important constraint to prevent misuse of this scheme. the cumulative amount of deposits in a Living Expense account in any one month is limited to KRW 250,000. this limit is based on the total amount of money that has beendeposited into the account during the month, not the account balance.

this rule is intended to prevent debtors from using the account to hide large amounts of assets or to make frequent deposits and withdrawals of highly liquid funds. as such, a living expense account isonly suitable for purely receiving and managing salary or basic living expenses, and should be used in conjunction with other regular accounts for frequent large transactions in excess of $2.5 million.

the table below summarizes the changes to the living expense protection limits due to this revision.

comparison of garnishment-proof living expenses and insurance protection limit changes

categoryexisting limits (before change)revised limits (effective February 2026)key changes non-Garnishable Deposits (Monthly) 1.85 million 250 increased by $650 guaranteed death benefit 1,000 1,500 million increase of KRW 5 million policy surrender/maturity refund 1,500,000 250 million increased by KRW 1 million

expanded insurance protection to cover unexpected risks

the strengthening of debtor protection extends beyond deposits to insurance. To prevent the worst-case scenario where an unexpected event threatens the livelihood of a borrower or their family, we've expanded protection for insurance proceeds.

guaranteed Death Benefit, up to $15 million safe and secure

the guaranteed death benefit limit that cannot be garnished will be increased from KRW 10 million to KRW 15 million.

this measure goes beyond just increasing the amount. it legally guarantees that if a borrower dies, their surviving family members will be able to provide a minimum amount of living expenses (such as funeral expenses). This strengthens the function of the social safety net to help ensure that not only the individual borrower, but their entire family can continue to make ends meet. as such, guaranteed death benefit garnishment protection is an essential safeguard to preserve a family's minimal dignity.

policy surrender value protection is also a reality

the protection limit for maturity refunds and certain surrender value protections will also be increased from $1.5 million to $2.5 million.

this change ensures that if a borrower is forced to cancel their policy to make ends meet, they can keep more of their surrender value without fear of garnishment. this can go a long way toward ensuring that borrowers have at least enough funds to get through the immediate crisis and get back on their feet.

timing note: All of these revised garnishment limits will apply to the first garnishment case filedafter the reforms go into effect (on or after February 1, 2026). it's important to note that they may not apply retroactively to cases already in garnishment proceedings.

FAQ: Frequently asked questions about living expense accounts

Q1. Can I open a living expense account before next February (living expense account implementation in 2026)?

A. No. The amendment to the Enforcement Decree of the Civil Enforcement Act, which contains the core content of the introduction of the Living Expense Account, will be implemented in February 2026. therefore, it will not be until February next year that financial institutions will be able to officially open these accounts.

Q2. Will the 2.5 million won living expense protection limit apply to deposits that are already in the process of being garnished?

A. The newly revised garnishment protection limit (2.5 million won) will be applied from the "first garnishment order application case filed" after the system is implemented. therefore, in principle, the old limit (1.85 million won) will likely apply to existing cases where a garnishment order has already been filed and the process is underway. only if a new garnishment order is filed, the increased limit of 2.5 million won will be applied.

Q3. What happens if I accidentally create more than one living expense account?

A. A person can only designate one primary accountacross all financial institutions to be protected. if a debtor attempts to open or maintain more than one account, the second account may not be legally protected from garnishment due to information sharing between financial institutions.

Q4. What happens if the cumulative monthly deposits in my living expense account exceed $2,500?

A. If the cumulative monthly deposits in a living expense accountexceed $2.5 million, the excess amount may be excluded from garnishment protection. because these accounts are only designated for the debtor's minimum living expenses, this rule is intended to prevent them from being misused by high net worth individuals as a way to avoid garnishment. Therefore, if your monthly income exceeds KRW 2.5 million, you should be careful to manage your funds, such as putting the excess in a regular account.

bottom line: Living Expense Accounts are a silver lining

the introduction of aliving expense account is a key pillar of a robust debtor protection systemthat provides a real anti-garnishment shield of up to 2.5 million won per month, giving borrowers hope to get back on their feet. it is significant because it eliminates the complicated legal battles of the existing system and provides immediate livelihood security.

it's important to start planning your finances ahead of February 2026, when the scheme comes into force. if you have any further questions about the scheme or have any queries based on your personal circumstances, please leave a comment. our team will be happy to help you with financial and legal information. Subscribe to stay up to date with the latest financial policy information!