A situation in which a borrower renegotiates the terms of its debts, usually in order to reduce short-term debt repayments and to increase the amount of time it has to repay them. If lenders do not agree to the change in repayment terms, or if the restructuring results in an obvious loss to lenders, then it is generally considered a default by the borrower. However, restructuring can also occur through a debt swap – a voluntary agreement by lenders to switch existing debts for new debts with easier easier repayment terms – in which case it can be very hard to determine whether the restructuring counts as a default.
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