Debt restructuring is a process that allows individuals facing cash flow problems and financial hardship, to reduce and negotiate their outstanding debts in order to restore liquidity in order to make progress. Financial debt problems threaten large numbers of folks. Many companies offer financial debt restructuring and consolidation services. Debt restructuring and debt consolidation offers the opportunity to reduce debt, handle your finances and start all over again with additional understanding of management of your capital.
Many debt consolidation programs are useless because they just change the terms of your loans without of addressing the main issue which simply is too much debt. If fact, the wrong program can cause you to pay more money in interest and for a longer duration. This type of situation often involves ‘kicking the can down the road’ and doesn’t attack the root of the problem. You should have an accountant look over your financial situation before agreeing to a debt consolidation program.
There are times in which bankruptcy is your best option. Bankruptcy has a very negative connotation to it. This is unfortunate because it can give you the opportunity for a fresh start. For example, if you lose your underwater home in a bankruptcy, you’ll be eligible to purchase another home in just 2 years. This is good in the end because the next home you buy will likely be much cheaper. Therefore, the monthly payment will be much less. Also, you will have a clean balance sheet.
Many personal debt problems ultimately stem from having negative equity in their home. Attempting to pay down the loan is too overwhelming and simply makes no business sense. This is why you should approach your financial situation like a business. In many cases, restructuring is the only sensible option. There are definitely consequences involved. On the other hand, there are consequences of doing nothing and consequences of believing that paying your debts is a moral issue.
When there is no realistic change to pay off a debt, some form of restructuring is inevitable. This is the case for the Greek government. Greece has already accumulated so much debt that there is virtually zero chance of paying it off. Even if the government raises taxes, it will still be nearly impossible because the economy would collapse as a result of the tax increases. Your personal balance sheet is no different than that of a coporation or a nation.