Debt Restructuring Ways & Methods
Debt Restructuring has many methods to resolved your debts. Way out of to resolved debts base on your revenue, cash flow and assets(I will talk on debt restructuring model). This is some methods that useful and most popular.
1.Debt payment period
Every debtors can ask creditors to reschedule installment include amount, term, interest rate. Example: – convert short-term loan to long-term loan
– extension period.
– reduced interest rate
– Reduced installment amount
That everything base on your revenue and suitable with personal loan and company
2.Reduction of principle and accrued interest
This way suitable for power debtor or crisis time(subprime ok). When crisis some company cash flow or personal revenue can not support to repay principle and interest (if government concern about over bankruptcy loss employment this way can happen)
3.Transfer of collateral asset and non-collateral asset to debt repayment
This way popular when debtor need to reduce dept for match to cash flow.
4.Sale of collateral asset and non-collateral asset to debt repayment
This way popular when debtor need to reduce dept for match to cash flow. When you sale some non collateral asset, you can ask some reduce principle or accrue interest. Because creditor get big lot money if calculate NPV will good position better wait 3-5 years.
5.Conversion debt to Equity
This way suitable listed company. This way good for reduce debt for raised new fund but lost of power in equity.
This major way to debt restructuring that better go to court and force sale asset.
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