starting February 2026, we're launching the Living Expense Account. you can protect up to $2.5 million per month in garnishment-free deposits, plus a guaranteed death benefit of up to $1,500. learn more about how to open a garnishment protection account and the benefits.
table of contents
- what is a living expense account?
- how it differs from traditional plans
- protection limits and coverage
- how to open a living expense account
- enhanced garnishment protection
- frequently Asked Questions
what is a living expense account?
everyone deserves to be able to maintain a minimum standard of living, even if they're in debt. But until now, when a creditor garnishes a debtor's passbook, their living expenses are often tied up, and the only way to get your money back is to go through the complicated process of asking the court to lift the garnishment.
living Expense Accounts are a new system designed to solve this inconvenience. starting in February 2026, one account per person can be opened at any financial institution in the country, and the money in the account cannot be garnished up to a limit of 2.5 million won per month. It's a passbook that is legally protected by the state to ensure that debtors and their families can make ends meet.
also known as a garnishment-proof account, it's a key part of the debtor protection system. By designating your paycheck as a living expense account, you'll have a certain amount of money each month that you can spend freely, instead of being tied up in debt.
how it's different
currently, the first $185 per month of your savings is still legally protected from garnishment. but in practice, this system hasn't worked well because banks have a hard time keeping track of how much a debtor has in multiple banks, so once they garnish the full amount, the debtor has to go through a cumbersome process of applying to the court to have the garnishment lifted.
the new living expense account system fundamentally solves this problem. when a debtor designates a living expense account in advance, the money in the account is exempt from garnishment from the start. they can protect their living expenses without having to go through a complicated court process.
the threshold for protection has also been raised from $1.85 million to $2.5 million to reflect inflation and the real cost of living. if you don't have enough money in your Living Expense Account, you'll be protected from garnishing the rest of your savings in other general accounts. for example, if you have $1.5 million in your living expense account, you can protect an additional $100 in your regular account.
living Expense Account protection limits and coverage
the Living Expense Protection limit is $250 per month, which is calculated based on a calendar month and resets every month. if you don't spend all 2.5 million won this month, it doesn't mean you'll have 5 million won next month.
you can open a Living Expense Account at any financial institution in Korea. this includes commercial banks, regional banks, savings banks, mutuals, post offices, and anywhere else that accepts deposits. However, only one account can be created per person. you can't create multiple living expense accounts, so choose carefully.
it's most efficient to designate the account you use for your paycheck as a living expense account. if your income is irregular, such as if you're a freelancer or self-employed, a living expense account can also help protect your savings from garnishment.
how to open a living expense account
you'll be able to open a living expense account starting in February 2026. the process is not much different than opening a regular account - you can apply in person at a local financial institution branch or through a mobile app.
the main document you'll need to open an account is an ID. you may also need additional proof of income. Each financial institution may have specific requirements, so it's best to check before you go.
you can also convert an account you already have into a living expense account. this is convenient because you don't need to open a new account, just change the properties of your existing account. however, it may take a few days after you apply for conversion before the cost of living protection limit is actually applied.
after you designate your account as a living expense account, your financial institution will notify your creditors, so they can't garnish the first $250 in your account. if a garnishment is filed by mistake, there will be a system in place to automatically reject it.
enhanced garnishment protection
it's not just living expenses accounts that will be protected - we're also strengthening protection for guaranteed death benefits. previously, only up to KRW 10 million of guaranteed death benefits were protected from garnishment, but from February 2026, up to KRW 15 million will be protected.
if the head of the household dies unexpectedly, the surviving family faces great financial difficulties. if the proceeds are garnished to pay off debts, it can be devastating. To prevent this from happening, the government has raised the limit on garnishment of guaranteed death benefits.
the surrender value protection limit has also been increased from $1.5 million to $2.5 million. the surrender value, which is the money you receive when you cancel your policy, is also important to your livelihood. The increase in this amount means that policyholders' rights are better protected.
these protections will apply to the first garnishment application filed after the system goes into effect, so foreclosures occurring after February 2026 will be subject to the new limits immediately.
indemnity insurance is insurance designed to cover risks such as death, illness, and injury. unlike savings insurance, these policies are intended to provide protection, and the broader coverage is consistent with the goal of protecting debtors' livelihoods.
frequently asked questions
Q1. Can anyone create a living expense account?
yes, any citizen of South Korea can open one. one account can be opened per person, regardless of whether they have debts or not. However, minors may need the consent of a legal representative.
Q2. What happens if I have more than 2.5 million won in my living expense account?
any amount over 2.5 million won is subject to seizure. for example, if you have KRW 400,000 in your living expense account, KRW 250,000 is protected and KRW 150,000 can be seized. Therefore, we recommend that you only keep the money you need for living expenses in your living expense account, and spread the rest among other accounts.
Q3. Can I get my existing garnished deposits back to my living expenses account?
no. The law does not apply retroactively to deposits that were garnished before the program went into effect. Only new garnishments will be covered by the living expense account protections. to have an existing garnishment released, you will need to file a separate motion with the court to have the garnishment released.
Q4. Can I change my living expense account?
yes, you can make changes. however, you'll need to close the existing paycheck account and designate the new account as your paycheck account - you can't have two paycheck accounts at the same time.
Q5. Do I still need to go through the garnishment release process?
the money designated as a living expense account is not subject to garnishment in the first place, so you don't need to go through a garnishment release process. However, if you have more than $250 in your regular account and it's been garnished, you'll still need to file for a release with the court.
wrapping up
the new living expense account system, which will be implemented from February 2026, will be a real boon for people in debt. up to $250 per month will be protected from garnishment, and the garnishment protection limit will be increased to ensure that you and your family can make ends meet.
if you're struggling with debt, make sure to open a Living Expense Account next February - it could be the small change you need to get your life back on track.
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