The recent financial Crisis in 1998 brought numerous changes to corporate re-organization in Korean market. In order to overcome financial Crisis of the corporation, insolvent obligations owed by the corporations were needed to be determined and regulated. The previous procedure of composition for insolvency and liquidation became impractical due to the complicated procedure and the lack of specific knowledge for restructuring by the public administrative officials. As this procedure was unsuitable for prompt normalization of the financial market during the Crisis, a new insolvency law was established. These are DEBTOR REHABILITATION AND BANKRUPTCY ACT and CORPORATE RESTRUCTURING PROMOTION ACT. The most useful method of corporate financial restructuring is Debt-equity swap. Debt-equity swap is usually achieved by the setoff. Under the CORPORATE RESTRUCTURING PROMOTION ACT, debt-equity swap is a process of corporate restructuring that takes place before a court orders. On the other hand under the DEBTOR REHABILITATION AND BANKRUPTCY ACT, debt-equity swap is undergoing by the court order, therefore debt-equity swap have a different legal effect for the joint debtor under these Act.