By definition, debt is a deferred payment or series of payments that are given to a creditor by a debtor, distinguishing it from immediate purchases. Debt also carries interest, which varies by lender and type of debt. Most Americans are familiar with the process since 80% of Americans have debt to pay. Mortgages are the most common debt that Americans tend to carry, followed by balances on credit cards, car payments, and student loans. This holds true for companies as well as individuals. Businesses are also at risk of defaulting on a loan. Sometimes it gets to the point where a company or person is unable to consistently pay off all their debt on time. This is when debt restructuring comes into play.

Debt restructuring is when the terms of a loan agreement are changed. The advantages of a restructured debt program are lower monthly payments and the prevention of escalating issues with borrowers. There are different ways to restructure debt, such as extending repayment timelines, consolidating multiple debts, lowering interest rates or balances.

Debt consolidation lets you take out a new line of credit or a loan in order to pay off existing debt. This approach leads to better terms such as a lower interest rate or a longer repayment period. For some people, dealing directly with their lender is not preferable. Instead of trying to negotiate restructuring arrangements directly with a lender, there are many 3rd party counseling organizations that can act as intermediaries for unsecured debt. By negotiating with creditors on your behalf, a counselor may be able to negotiate lower monthly payments, interest rates,  and possibly waive fees.

Loan forbearance or deferment is another option for those who are struggling to make sequential monthly payments. When arranging this type of plan, monthly payments can be skipped without penalty or reprisal. The ability to have a gap without fearing a collection agency is perfect for Americans who find themselves in hard times or have temporary lifestyle setbacks.