SEOUL(REUTERS) - Many small business owners in South Korea recognise themselves in the cash-strapped characters of the wildly popular Netflix drama Squid Game, who vie desperately for a chance to win US$38 million (S$51 million), exposing a debt trap that is all too familiar.

Nearing retirement at 58, Yu Hee-sook paid off her debts long ago, but still gets calls from collection agencies threatening to seize her bank accounts, as the loans got securitised and sold to investors without her knowledge.

"In Korea, it's like the end of the world once you become a credit delinquent," said Yu, who got by on small jobs, such as writing for movie magazines, during the 13 years it took to pay off the debts she incurred over a movie that flopped in 2002.

"All I wanted was chances to repay debt, but banks don't let you make money," added Yu, who feels trapped in an unforgiving life-long ordeal, just like the 456 game show contestants of the'Squid Game'.

While foreigners may associate South Korea with the boyband BTS and sleek Samsung smartphones, the drama points to a dark flipside of rising personal borrowing, the highest suicide rate among advanced nations, and the rarity of getting free of debt.

Record household borrowing is fuelling private investment and housing growth, but unforgiving social mores about debt often blur the line between personal and business loans, burdening those who run small businesses.

Personal bankruptcies soared to a five-year high of 50,379 last year, court filings show.

The proportion of those falling behind on more than one type of personal debt payment has risen steadily to reach 55.47 per cent by June from 48 per cent in 2017, figures from the Korea Credit Information Services show.

"If Donald Trump was a Korean, he probably couldn't have become the president, having been bankrupted many times," said a lawyer in Seoul, who specialises in personal bankruptcy.

"In the United States, corporate debt is more separated from personal debt."

An inadequate social safety net for small entrepreneurs and the lack of a rehabilitatio...