There's a few comments talking about household debt and no one talking about failing small business debt that is talked about in almost every Korean drama and movie including Parasite and Squid Game. Every single person that has lived in Korea has seen the crazy turnover in small businesses and how they come and go at a rapid pace.
Starting a LLC seems to be difficult in Korea and most people start small businesses (chicken restaurants, cafes, whatever the latest trend is that is sure to burn out eventually), with personal money/credit. This is usually a bad idea, but many, many people that I've seen around essentially every community in this country have a failing/fledging small business with causalities on the other end.
The other reason is that successful small and medium sized business owners are often ruthless assholes. People don't want to be stomped on by some asshole driving a BMW sending his kids to boarding schools while they slave away for that.
Since there's little middle ground between the Chaebols and the small businesses, people often feel forced into gambling with starting their own small business, and yeah, there's a *lot* of wasted money and debt that comes from that.