Debt Restructuring

Debt restructuring is a process in which the public, private companies and even sovereign entities who are facing problems in cash flow or going through any financial distress. These people can negotiate their debt amount and reduce the repayment amount so that the liquidity can be restored and they can be rehabilitated and continue with their operations. However, one should be clear about debt restructuring, refinancing and workouts. Refinancing is the replacement of your old debt by a new one when one is not under any financial distress. Restructuring if it occurs out of court it is referred to as workouts and is becoming very popular now a days.

Debt reconstructing is considered a safe alternative to bankruptcy and is also very less expensive. The client’s time and effort is required to negotiate with the banker, vendors, creditors and other tax authorities. The restructuring of debt involves reduction in the debt and also an extension in the terms of payments. There are several debt restructuring companies available all over UK and they help the companies in coming out of bankruptcy.

The services provided by most of the companies will include:

  • Most of the companies allow you to make them single payment every month which will be distributed to all the creditors to manage your debt well.
  • Most of these company persons are expert in their job that is debt restructuring.
  • They are the one who will calculate your debt and also let you know the exact time when you will become debt free.
  • They will check upon your debt and provide you with the best restructuring program which will deal with your issue individually.
  • The debt restructuring program will help you release the pressure that you often get from your lender and they do this by liaising with your lender either directly or on your behalf.

Some debt restructuring program includes:

  • Debt for equity swap – In this the creditors of the company allow or agree to cancel a part of the debt or all of the debt in exchange to some equity in the company. This is generally done in case of large companies who run into any kind of financial trouble.
  • Some of the companies go for informal debt repayment, an agreement for the same allows the clients to pay their debt in installments if they cannot pay at one go.