Effective Date — October 8, 2026
Key Changes — The “Act on Bankruptcy and Rehabilitation” already stipulates that debtors should not receive disadvantages such as employment restrictions due to bankruptcy, etc. However, there were still provisions in several individual laws that uniformly listed "a person who has been declared bankrupt and has not been restored" as a disqualifying factor for permits, registration, and qualifications. This was an inconsistent situation.
This revision addresses such provisions in 12 laws under the jurisdiction of the Health and Welfare Committee all at once, aligning them to generally prohibit discriminatory treatment based on bankruptcy.
Confirmed Revised Laws (Partial List) - “Act on Health Functional Foods” - “Medical Device Act” - “Digital Medical Device Act” - “Cosmetics Act” - “Act on Promotion of Mental Health and Support for Welfare Services for Persons with Mental Illnesses”
⚠️ The complete list of 12 laws and the article numbers deleted or revised in each law require verification of the official Gazette. Please be sure to check individually whether the underlying law for your industry is included.
Previous Rectification — With the same purpose, 2 laws under the jurisdiction of the Public Administration and Security Committee were also rectified first (Law No. 20872, promulgated on April 1, 2025, effective October 2, 2025). This means that the rectification of disqualifying clauses is being carried out sequentially by committee, so similar changes may follow in other areas of law.
## 2. You Must Accurately Understand What 'Restoration' Means
Even if disqualifying provisions are rectified, any remaining disqualifying provisions in other laws still depend on the 'rehabilitation status'. Therefore, it's important to first know where you stand legally.
Automatic Rehabilitation — This refers to cases where rehabilitation occurs without a separate application. - When a Discharge Order is finalized — This is the most common case. Once discharge is finalized, the legal and judicial restrictions resulting from the bankruptcy judgment are lifted. - 10 years have passed since the bankruptcy judgment without a final conviction for fraudulent bankruptcy
Application for Rehabilitation Decision — If you have fulfilled all obligations to creditors regarding the bankruptcy, you can apply to the court for a rehabilitation decision.
Commonly Overlooked Points in Practice — The bankruptcy judgment and discharge are separate procedures. There are many people who think, "The bankruptcy is over," but have not confirmed whether the Discharge Order has been finalized. Before applying for registration or licensing, first check the discharge decision and its finalization status. If rehabilitation has been granted, you can apply immediately from that point.
## 3. What Should You Do Now
If Your Application Was Rejected Before October 8th — The revised law takes effect on October 8th, eliminating disqualifications, so you can reapply. However, there may be transitional provisions in the special provisions, so it should be distinguished from the issue of reversing existing rejection or refusal decisions.
If You Have Already Been Denied a License or Registration — Whether existing cancellation decisions based on bankruptcy are automatically restored by this revision depends on the transitional provisions in the special provisions. ⚠️ This part requires checking the original text, and if you intend to challenge the decision, the deadline for filing an objection or administrative review (90 days from the date of the decision) comes first.
Required Documents — When applying for registration or a license, you often need to prove that you do not have any disqualifications. - Exoneration Decision (including final designation) or Restoration Decision - Identification card, proof of requirements for the relevant industry
Verification Steps 1. Check if the legal basis for the business you want to operate is included in these 12 revised laws. 2. If it is included, apply after October 8th. 3. If it is not included, first resolve the issue of restoration before applying.
## In Summary
The disqualification provision based on bankruptcy stemmed from the old premise that "a person who has not repaid their debt cannot be entrusted with that work," but in reality, it often blocked businesses that had nothing to do with bankruptcy. This revision is a step in the flow of removing that premise.
If you stopped at the disqualification provision when trying to restart, you should check again based on October 8th. However, you need to check the complete list of the 12 revised laws and the transitional provisions in the official gazette, so if you are preparing for a business, start by identifying the relevant legal basis.
*This article is an administrative trend guide compiled by Hwang Yun-sang Administrative Agent Office based on publicly available information. The applicability to individual cases requires verification with the relevant authority.*