Korea Inherited Estate Bankruptcy Cost & Creditor Distribution Calculator

Estimate 2026 Korean inherited-estate bankruptcy court costs, secured shortfall, estate-claim waterfall, creditor recovery and three realization scenarios in KRW.

2026 Korean law and court-source planning model

Sources checked 2026-08-19 · service-fee unit effective 2026-07-01

Case facts and timing

Three months is a first check date, not an automatic legal conclusion. Enter the limited-acceptance and payment facts accurately.

people

Service estimate: (10 + creditors × 4) × KRW 5,640

Current estimated service fee

KRW 169,200

KRW 5,640 per unit; the court order controls

Assets and secured rights

Collateral is separated into secured recovery, shortfall and surplus rather than simply added to free assets.

KRW

Estimated net value of cash, real estate, vehicles and other assets

KRW
KRW
KRW

Procedure costs and household cash

The actual court prepayment order controls. Professional fees affect household cash but are not automatically deducted from estate assets.

KRW
KRW

This is not a statutory fixed fee; enter a case-specific estimate.

KRW
KRW
KRW

Funeral expenses and evidence

This uses Seoul Bankruptcy Court practice-reference caps. The receiving court may recognize a different amount.

KRW
KRW

Claims by legal tier

Legal classification is not automated. Do not duplicate funeral or modeled procedure costs in another field.

KRW

Confirmed tax, wage or similar claims; excludes funeral cost

KRW
KRW
KRW

The calculator adds the secured shortfall separately.

KRW
KRW

Scenario ranges

Legal tiers stay fixed while realizable assets and variable procedure costs change across scenarios.

%

Enter 0–50%

%

Enter 0–50%

Conservative assumption

Assets -15% · costs +20%

Optimistic assumption

Assets +15% · costs -20%

Base-scenario result

This is an input-based planning estimate, not a distribution schedule for court filing.

Initial distributable estate

KRW 60,000,000

General-claim recovery rate

37.33%

First shortfall tier

6. General inherited claims and secured shortfall

Household cash need

KRW 2,570,200

Conservative

Distributable estate
KRW 51,000,000
Total distributed and spent
KRW 51,000,000
Unpaid amount
KRW 108,770,200
Overall waterfall recovery
31.92%

Base

Baseline
Distributable estate
KRW 60,000,000
Total distributed and spent
KRW 60,000,000
Unpaid amount
KRW 83,070,200
Overall waterfall recovery
41.94%

Optimistic

Distributable estate
KRW 69,000,000
Total distributed and spent
KRW 69,000,000
Unpaid amount
KRW 57,370,200
Overall waterfall recovery
54.6%

Secured recovery and shortfall

Net collateral value
KRW 95,000,000
Secured recovery
KRW 95,000,000
Shortfall moved to general claims
KRW 25,000,000
Collateral surplus added to estate
KRW 0

Cash budget and funeral allowance

Estimated court advance
KRW 570,200
Administration and liquidation cost
KRW 3,500,000
Household cash need
KRW 2,570,200
Total procedure budget reference
KRW 6,070,200
Estimated recognized funeral cost
KRW 5,000,000

Documented method: condolence money was deducted from funeral spending.

Base-scenario distribution waterfall

Claims within one row are modeled pro rata. Confirm the actual legal tier and internal estate-claim order for the case.

Claimed, distributed, unpaid and recovery rate by distribution tier
TierClaimedDistributedUnpaidRecovery
1. Administration and liquidation costsKRW 3,500,000KRW 3,500,000KRW 0100%
2. Applicant court-cost advancesKRW 570,200KRW 570,200KRW 0100%
3. Funeral and other priority estate claimsKRW 10,000,000KRW 10,000,000KRW 0100%
4. Other estate claimsKRW 1,000,000KRW 1,000,000KRW 0100%
5. Priority bankruptcy claimsKRW 2,000,000KRW 2,000,000KRW 0100%
6. General inherited claims and secured shortfallKRW 115,000,000KRW 42,929,800KRW 72,070,20037.33%
7. Subordinated bankruptcy claimsKRW 1,000,000KRW 0KRW 1,000,0000%
8. LegaciesKRW 10,000,000KRW 0KRW 10,000,0000%

Initial filing-timing check

Within the basic three-month check period

Three-month check date
2026-09-20
Difference from as-of date
32 days remaining

Civil Act Article 1045(2), acceptance or renunciation timing and actual payment completion may change the analysis. Do not treat this as a legal conclusion.

Review warnings

  • Secured rights are generally enforced outside bankruptcy, with only the shortfall participating. Confirm the collateral scope and disposal cost.
  • Professional fees are included in household cash planning but are not deducted from estate assets without a confirmed legal classification.

Checklist before professional review

  • Family registry, basic certificate and proof of death date
  • Limited-acceptance, renunciation or separation orders and service dates
  • Inventory of cash, insurance, property, vehicles and refunds
  • Mortgages, pledges, leases and estimated disposal costs
  • Principal, interest, cause and priority evidence for each creditor
  • Tax, wage, retirement, funeral and condolence-money records
  • Payments already made or costs already paid from estate assets
  • Court fee orders, deposit notices and professional quotations

Related calculators

What an inherited-estate bankruptcy resolves

An inherited-estate bankruptcy in Korea is not the heir’s personal bankruptcy.
It gathers property left by the deceased into a separate bankruptcy estate, realizes that property and distributes the proceeds to inherited creditors and legatees under the applicable legal order.
Even after limited acceptance, a family may face misdistribution risk when there are several creditors, secured assets, priority claims or uncertain realization costs.
This calculator organizes those moving parts before a court or professional consultation.

Measure the estate

Separate unencumbered assets from collateral and use realistic sale values.

Separate the costs

Distinguish court advances, estate administration costs and household professional fees.

Model the waterfall

Allocate each tier in order and identify the first tier that is not paid in full.

2026 legal basis and court-source assumptions

The model uses the current Debtor Rehabilitation and Bankruptcy Act checked on August 19, 2026.
Articles 299 and 300 address eligible applicants and filing timing, including the situation after limited acceptance or estate separation while payment to inherited creditors and legatees remains unfinished.
Article 389 frames inherited property as the bankruptcy estate, while Articles 411 through 413 address separate satisfaction by secured creditors and participation for an unpaid shortfall.
Articles 440 through 477 provide the statutory framework for pro rata payment within a rank, priority claims, inherited claims ahead of legacies, subordinated claims and estate claims.

Primary legal rules used by the inherited-estate bankruptcy calculator
AuthorityCore ruleModel treatment
Act Articles 411–413Separate satisfaction and shortfall participationSecured recovery, shortfall and collateral surplus are separated
Act Articles 440 and 443Pro rata payment within a rank and inherited claims before legaciesTier recovery rates and a later legacy tier
Act Articles 473–477Scope and priority payment of estate claimsProcedure, funeral and other estate-claim groups
Civil Act Article 1045 and Act Article 300Basic three-month check and unfinished-payment reviewA check date and separate Article 300 status

The service-fee estimate uses KRW 5,640 per electronic postal service unit, effective July 1, 2026.
It applies the general court bankruptcy guidance formula of ten base units plus four units per creditor as an editable planning estimate.
A receiving court’s payment or correction order always controls, and the trustee deposit is not a fixed statutory amount.

How collateral flows into general inherited claims

Adding the full sale price of mortgaged property to free estate assets can materially overstate what general creditors may receive.
The calculator first subtracts direct disposal cost from the expected collateral sale price.
The secured creditor’s modeled recovery is the smaller of the secured claim and that net collateral value.
Any secured shortfall moves into the general inherited-claim tier, while only a collateral surplus increases the free distribution pool.

Worked collateral example

  1. Expected collateral sale value: KRW 100,000,000
  2. Direct disposal cost: KRW 5,000,000, leaving KRW 95,000,000
  3. Secured claim: KRW 120,000,000, so modeled secured recovery is KRW 95,000,000
  4. Secured shortfall: KRW 25,000,000 added to general inherited claims

Actual results may differ because a maximum secured amount, confirmed debt, tenant deposit, tax claim, disposal method or cost allocation can change the secured position.
Review the registry, security agreement, creditor statement and expected sale expenses for each asset rather than combining unlike collateral into one unsupported total.

Why court costs, professional fees and funeral costs are separate

Cash paid first is not necessarily the final household burden

An applicant may initially pay the filing stamp, service fee and court-ordered deposit from personal funds.
Seoul Bankruptcy Court practice guidance and the court trustee manual describe treatment of certain applicant advances as estate claims, but a severely deficient estate may not reimburse every won after necessary administration and realization expenses.
The calculator therefore includes court advances in household cash planning and also presents them as a separate modeled waterfall group.
A lawyer or judicial scrivener quotation is included in household cash need but is not deducted from estate assets without a confirmed legal classification.

Funeral evidence and condolence-money records matter

Seoul Bankruptcy Court Practice Rule 376 provides a local practice reference for funeral spending in inherited-estate cases.
Where funeral spending and condolence money are documented, the model uses net spending after condolence money.
If evidence is insufficient, it uses the smaller of actual funeral spending and a reference cap of KRW 2 million, KRW 3 million, KRW 5 million or KRW 10 million depending on estate size.
These are not nationwide guaranteed allowances, and the court may reach a different amount based on the facts.

Documented method

Estimated allowance equals funeral spending minus condolence money, floored at zero.
Keep invoices, bank transfers, funeral-home statements and condolence records together.

Insufficient-evidence method

The smaller of spending and the Seoul practice-reference cap is used.
The result is not a final court-approved estate claim.

Reading the eight-tier distribution waterfall

The waterfall moves from common administration costs through legacies.
It pays a tier in full before moving to the next tier, and allocates the available balance pro rata when one tier cannot be paid in full.
A tier after the first shortfall may receive nothing.
Because the overall waterfall recovery rate includes procedure-cost groups, also inspect the separate general inherited-claim rate when assessing ordinary creditor recovery.

  1. Common administration, realization and distribution costs
  2. Modeled reimbursement of applicant-paid filing, service and deposit costs
  3. Estimated funeral allowance and other confirmed priority estate claims
  4. Other estate claims
  5. Confirmed priority bankruptcy claims
  6. General inherited claims plus any secured shortfall
  7. Subordinated bankruptcy claims
  8. Legacies after inherited creditors

Using conservative, base and optimistic scenarios

Real estate and vehicle sale proceeds can differ from appraisal values, while storage, appraisal, notice and sale costs can exceed an early quotation.
The conservative scenario reduces realizable assets and increases variable costs by the percentages entered.
The optimistic scenario increases assets and reduces variable costs, while the base scenario uses the entered amounts unchanged.
Filing stamp, service fee and trustee deposit stay fixed across scenarios because they are court-advance estimates rather than values that naturally move with sale proceeds.

  • If general claims are paid in full even conservatively, recheck omitted costs and whether each asset belongs to the estate
  • If the first shortfall tier changes between base and conservative results, prioritize evidence for that tier
  • If substantial unpaid claims remain even optimistically, consider the court process before any voluntary payment
  • If assets remain after every tier, confirm insolvency and residual ownership rather than assuming the balance automatically belongs to an heir

Scenario analysis does not change legal ranking.
When classification is uncertain, preserve a reasonably adverse version for professional review instead of moving a claim to a later row merely to improve the result.

Understanding the filing-timing check

The calculator adds three calendar months to the date inheritance opened and displays that date as a basic checkpoint.
It links the Civil Act Article 1045 separation period with Debtor Rehabilitation and Bankruptcy Act Article 300, but it does not conclude that every filing right expires on that date.
If the basic date has passed while limited acceptance or estate separation exists and payment to inherited creditors and legatees remains unfinished, the result flags the latter part of Article 300 for review.
Valid limited acceptance, deemed unconditional acceptance, Civil Act Article 1045(2) and actual payment completion require a fact-specific legal review.

Items to verify promptly after the checkpoint

  • Date of death and when the heir learned of the inheritance
  • Limited-acceptance or renunciation filing and service dates
  • Creditor notice, demand and payment status
  • Assets already sold and payments already made
  • Receiving court and current readiness of the application and schedules

Step-by-step use

  1. Enter the opening date and procedure facts.
    Confirm the death date, limited acceptance or separation and whether creditor payments have ended.
  2. Divide assets by security status.
    For collateral, enter expected sale value, secured debt and direct disposal cost together.
  3. Separate court and household costs.
    Use actual court notices and professional quotations, removing any duplicated expense.
  4. Enter claims only in a confirmed tier.
    Distinguish taxes, wages, ordinary debt, subordinated items and legacies using supporting documents.
  5. Compare scenarios and the first shortfall tier.
    Take the organized inventory and claim schedule to the receiving court or an insolvency professional.

Frequently asked questions

Is inherited-estate bankruptcy always required after limited acceptance?

No.
A simple estate may be handled through limited-acceptance liquidation, while numerous creditors, secured assets, ranking disputes or difficult pro rata allocation may justify reviewing the separate procedure.

Why is secured recovery calculated before the waterfall?

A secured creditor generally exercises separate satisfaction outside the bankruptcy distribution and participates only for a shortfall.
The model simplifies that structure by separating secured recovery and shortfall first.

Is KRW 10 million always allowed as a funeral estate claim?

No.
KRW 10 million is the highest Seoul practice-reference cap for insufficient evidence at a particular estate size, not a nationwide guaranteed allowance.

May professional fees be deducted from the bankruptcy estate?

The contract and purpose do not produce an automatic answer.
This calculator includes the quotation in household cash need and does not deduct it from estate assets before classification is confirmed.

Can an heir pay creditors using the calculated amounts?

That is not recommended.
A classification or estate-ownership error may create disputes, avoidance issues or heir-liability questions, so use the result only to prepare for a court or professional review.

Official sources and final checks

Supreme Court decision 2022Da285097, issued January 4, 2024, distinguishes the general treatment of unattachable assets in inherited-estate bankruptcy from protection for a statutory retirement-pension entitlement.
Asset-specific treatment means that insurance, pension, trust, jointly owned property and pre-death or post-death deposits should be classified before they are entered as estate assets.
Jurisdiction is generally tied to the place where inheritance opened, so the heir’s current residence alone should not determine the receiving court.

Turn the estimate into a document checklist

Arrange asset and claim evidence in the same order as the result to spot omissions and duplicate entries.
Confirm claim classification, filing timing, court deposit and actual filing documents with the receiving court or a Korean insolvency professional before acting.