The number of credit delinquents in Korea had been growing steadily since 1997 and had reached 3,700,000 by the end of 2003, which was about 8.4% of the population. The government initiated several support programs, but the number of credit delinquents has decreased very slowly. In order to allow for successful recovery of credit delinquents, it is imperative to reduce debts in a more comprehensive manner, to clear the impediments for easy use of personal bankruptcy mechanisms, and to provide incentives to encourage debtors to make progress on their repayment plans. While there has been much change in terms of learning to live with bankruptcy as an inevitable part of a market economy, there is still much to be done. The reality of "moral hazard" in bankruptcy discharge should be uncovered. Legal restraints discriminating against bankrupts must be removed. The repayment period of individual rehabilitation and individual workouts must be shortened to three years. Personal guarantors for debtors in rehabilitation proceedings should be protected as much as the debtors are during the repayment period in rehabilitation proceedings. Debtors need to be able to keep their mortgaged residences during the proceedings. The history of insolvency has shown that society can benefit as much as or more than debtors themselves from the discharge of unpaid debts because with a fresh start the debtor has an incentive to work hard. The starting point to personal bankruptcy law reform is this belief.