The study investigates the problem of the Korea’s household debt through interna-tional comparison. Household leverage measured as the ratio of debt to disposable income is at its historic peak and has increased since 2004. The ratio of household debt to disposable income has ranked among top 10 in OECD countries since 2006. Nevertheless, the household arrears are still at a low level. Therefore the paper ana-lyzes how the financial stability policy for the recent global financial crisis affected household arrears. Moreover, this paper shows how the exit strategy influences the household arrears. In this context, the paper studies structural problem of house-hold debt. In Korea, more than 90 percent of household debt has variable rates, leaving borrowers exposed to future rate movements. Therefore this paper suggests policy alternatives for improvement in household debt.