Firms with debts worth at least three billion won, or about two-point-four million U.S. dollars, are expected to be eligible for bankruptcy filings to their lenders.

Financial regulators in South Korea said they will commence writing related ordinances to the Corporate Restructuring Promotion Act which is expected to be passed at the National Assembly this week.

The fresh bill will enable troubled firms to apply for restructuring assistance by lenders. An older version of the bill limited credit assistance to firms with at least 50 billion won in debt.

Creditors are considered more efficient than courts in reorganizing troubled firms by minimizing the adverse effects of corporate restructuring on local markets.