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Debt restructuring

What is debt restructuring?

The term debt restructuring can have two meanings. On the one hand, it refers to the renegotiation of a debtor’s liabilities towards a creditor with that very creditor (e.g. through novation or a modification of the debt). On the other hand, it may also involve the transfer of a remaining outstanding credit or loan balance to another creditor. The latter form of debt restructuring may be subject to favourable fee arrangements if an old loan agreement is terminated, the outstanding loan balance is repaid and a new loan agreement is concluded with a different lender (as a replacement).

 

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