Court Deposit for Repayment
Purpose of Court Deposit for Repayment
- If the creditor refuses or is unable to accept the repayment from the debtor, the latter may discharge his or her debt obligation by depositing the subject matter into the court. The same shall apply where the creditor cannot be ascertained without any negligence on the part of the debtor. (Article 487 of the Civil Act)
· Possible Scenarios Where The Creditor Is in Default
· The debtor visits the address of the creditor for repayment, but finds that the creditor has already moved away and the debtor is unable to contact the creditor.
· The debtor tries to remit the repayment, but finds that the bank account number which was informed by the creditor is not in existence.
· The creditor refuses to accept repayment, charging interest rates that are higher than the agreed rate.
· The debtor is unable to make repayment due to an attachment order or a provisional attachment order over his or her asset.
Effect of Court Deposit for Repayment
- If the court deposit has been completed, the debtor shall be discharged from his or her debt obligation. (Article 487 of the Civil Act)
Place of Court Deposit for Repayment
- The deposit shall be made with the Deposit Office in the place for the performance of the obligation. (Article 488(1) of the Civil Act)
· The Courts shall be in charge of administering the matter regarding the court deposit (Article 2 of the Court Organization Act), and District Courts, their branches and County Courts take charge of such matters.
※ You may find locations of the Courts at:
Court location, Court of Korea
- If there are no special provisions under the statutes in respect of the Deposit Office, the court must, upon the application by the debtor who is willing to make repayment, designate a Deposit Office and appoint a custodian of the deposited article. (Article 488(2) of the Civil Act)
Application and Payment Procedure
Application for Court Deposit
- A person who applies for a court deposit shall fill out two copies of the application form, submit them to the Court Deposit Officer, and deliver the article to the designated custodian (or deposit the money to the designated bank). (Article 4 of the Deposit Act; Article 20(1) of the Regulations of Deposit)
- An applicant for court deposit shall fill out the application form with the followings, write his or her name and sign it. If the applicant appoints a legal representative, the representative shall write a name/address, and sign it. If the applicant makes an application in his or her capacity of a public officer, he or she shall specify the name of the office and his or her position, who is a public officer makes an application as a capacity of the depositor. (Article 20(2) of the Regulations of Deposit)
1. Depositor's name (or business name); address (of head office or main office); and National Registration Number (or Business Registration Number)
2. Amount to be deposited; name of the document, page number(s), any document annexed thereto, and redemption date (if the article to be deposited is a negotiable document); and name, type and quantity of the article to be deposited
3. Material Facts for Deposit
4. Statutory Authority for Deposit
5. Recipient's name (or business name), address (of head office or main office); and National Registration Number (or Business Registration Number), if any recipient is required for the deposit
6. If any right of pledge, Chonsegwon (right of registered lease on deposit basis), or mortgage is to be extinguished due to the deposit, such right shall be specified.
7. If any consideration is to be required, such consideration shall be specified.
8. If any confirmation or approval from a public office is required to redeem the deposit, the name of such office shall be specified.
9. If the application for deposit was made as a consequence of legal proceedings, the name of the court and case number shall be specified.
10. Name of the court in charge of the deposit
11. Date of application
※ You may find the deposit application form at:
Claim for and Receipt of Deposit
Notice by Depositor
- The depositor must, without delay, give notice of the deposit to the creditor. (Article 488(3) of the Civil Act)
Claim for and Receipt of Deposit
- If the creditor claims for and receives the deposit, the debt obligation owed to him or her may be discharged.
- A person who intends to claim for and receive the deposit shall submit the claim form, attaching the following documents (Article 33 of the Regulations of Deposit):
· Notice of Deposit issued by the Deposit Officer (Article 29 of the Regulations of Deposit) Notwithstanding this, no Notice of Deposit is required in the following circumstances:
√ A circumstance where the deposit amount is KRW 50,000,000 or less (including a circumstance where the face value of the deposited negotiable document is KRW 50,000,000 or less). Notwithstanding this, if the claimant is a public office or an unincorporated corporation/foundation, the maximum amount for such deposit shall be KRW 10,000,000 or less.
√ A circumstance where a certificate of deposit or a letter of approval from the interested party is attached to the claim form
√ A circumstance where the claim was issued pursuant to a compulsory enforcement or a disposition for arrears of taxes
√ A circumstance where no Notice of Deposit was posted
· Any document proving that the claimant has a right to claim for the deposit. However, in the case where it is evident from the certificate of deposit, such document is not required.
· If any consideration for the deposit is required, the following documents are required: depositor's written statement, written judgment, official document or other public documents prepared by public offices. (Article 10 of the Deposit Act)
Withdrawal of Deposit
Withdrawal of Deposit
- In one or more of the following circumstances, the depositor may withdraw the deposit by proving such circumstance. (Article 9(2) of the Deposit Act)
· A circumstance where the creditor has approved such deposit, or where the creditor gives notice of approval to the Deposit Office, or where the depositor intends to withdraw the deposit before any judgment being rendered by the court. (Article 489 of the Civil Act)
· A circumstance where the deposit was done by error
· A circumstance where cause of the deposit has been extinguished
※ However, a deposit may not be withdrawn if a pledge or a mortgage has been extinguished by making the deposit. (Article 489(2) of the Civil Act)
- If a deposit is withdrawn, it is deemed that the deposit has not been made. (Article 489(1) of the Civil Act)
- If a deposited article is money, any right to receive or collect interest accrued on the deposited amount shall expire after 10 years unless such right is exercised during this period. (Article 9(3) of the Deposit Act)
Raising Objection
Raising Objection against Disposition
- A person who is dissatisfied with a disposition taken by a Deposit Officer may raise an objection to the District Court which has jurisdiction. (Article 12-(1) of the Deposit Act)
- A person who raises the objection shall submit the application form to the Deposit Office. (Article 12-(2) of the Deposit Act)
Deposit Officer's Review
- If the Deposit Officer recognizes that an objection raised by a complainant has reasonable grounds, the deposit officer shall take a disposition according to the purport of the objection raised and notify the complainant of the contents of such disposition. (Article 13(1) of the Deposit Act)
- If the Deposit Officer recognizes that an objection does not have reasonable grounds, he or she shall submit his or her letter of opinion to the District Court, which has jurisdiction within 5 days from the date on which he or she receives the application form. (Article 13(2) of the Deposit Act)
Decision and Appeal with Respect to Objection Raised
- The District Court, which has jurisdiction, shall hand down a judgment with reasoning and such judgment shall be delivered to the complainant. If the judgment is in favor of the complainant, the District Court shall order the Deposit Officer to take a reasonable disposition. (Article 14(1) of the Deposit Act)
- With respect to the trial court's decision, the complainant may appeal against the decision pursuant to the Non-Contentious Case Procedure Act. (Article 14(2) of the Deposit Act)