Debt Restructurings & Resolutions
Debt restructuring is a process where a borrower and lender come to an agreement to modify the terms of an existing debt agreement. This may involve reducing interest rates, extending the repayment period, or changing the type of debt instrument. The goal is to help the borrower meet their debt obligations and avoid default, while also mitigating the risk for the lender. Debt restructuring can be an effective tool for managing financial distress and improving the long-term viability of a business or individual's finances.
Benefits of Debt Restructuring
Debt restructuring can provide several benefits for both the borrower and lender, including:
- Extended repayment period: Debt restructuring can involve extending the repayment period, which can lower the monthly payments and make it easier for the borrower to manage their debt.
- Reduced interest rates: By negotiating lower interest rates, the borrower may be able to save money on the total cost of the debt.
- Improved credit score: Successfully restructuring debt can improve the borrower's credit score, as it demonstrates a commitment to fulfilling their financial obligations.
- Improved financial stability: By reducing debt payments and improving cash flow, debt restructuring can help the borrower achieve greater financial stability and security.
Our Role
- Assessing the borrower's financial situation
- Negotiating the terms of debt restructuring
- Providing financial advice and support
- Managing risk
- Maintaining ongoing communication
Papervalue play a critical role in debt restructuring, helping borrowers manage their debt more effectively and avoid default or bankruptcy.
As per the RBI, debt restructuring has several purposes for coming into existence.
- To ensure timely and transparent mechanism to support borrowers.
- To reduce the losses incurred to the lenders and shareholders.
- To protect and preserve those corporations’ facing difficulty
- To revive the firms keeping in mind its stakeholders and creditors.
Hence, debt restructuring is a win-win situation both for the lenders and the borrowers. Moreover, the small businesses that are thinking of expanding their business and have just set their foot into the business industry can benefit from this process.
Debt resolution is a process where a borrower and lender work together to resolve outstanding debts. This may involve negotiating a repayment plan, settling the debt for a reduced amount, or pursuing other solutions such as bankruptcy. The goal is to find a solution that is mutually beneficial and sustainable for both parties, and to help the borrower manage their debt obligations in a responsible and effective manner. Debt resolution can be an effective tool for individuals and businesses who are struggling with unmanageable levels of debt.
Debt resolution typically involves negotiating with creditors to settle debts for less than the full amount owed. Key features may include:
- A structured repayment plan or lump-sum payment to the creditors
- An agreement to waive or reduce interest, fees or penalties
- A requirement to cease collection activities
- A negative impact on credit score
- Possible tax implications for forgiven debt
- A potential for legal action if the terms of the agreement are not met.
We have a specialised multi-disciplinary team who caters to provide across the board services for NPA and NCLT matters. Our team is a great blend of Lawyers, Bankers and Chartered Accountants having rich expertise and experience in Banking Matters, Litigation, NPA Resolution, Corporate Restructuring, Regulatory Compliances and related Advisory Services.
Our team has the ability to assist any corporate in steering through the most complex issues while undergoing the NPA recovery process. Our team’s deep and practical understanding of the subject coupled with the propensity to develop a righteous understanding of client’s business enable us to deliver appropriate advice to our client.
Our team is a one stop solution for across-the-board services pertaining to the Insolvency Code and we strive to deliver end to end solutions to the utmost complicated issues in a most pragmatic manner.
One Time Settlement
One-time settlement (OTS) is a type of debt resolution in which a borrower negotiates with a creditor to pay off an outstanding debt with a one-time lump sum payment that is less than the total amount owed. This negotiated amount is typically less than the original debt amount, as the creditor is willing to accept a lesser amount in order to settle the debt quickly and avoid the risk of the borrower defaulting on the debt entirely. In some cases, an OTS may also involve a structured repayment plan with multiple payments, rather than a single lump sum payment.
How and when the borrower should approach the Financial Institution or Bank for One Time Settlement?
Inorder to avail the best OTS terms, the borrower should have a better negotiation edge over the lender Financial Institution or Bank. The Lenders are not willing to offer considerable
waiver under OTS when there is ample scope to recover its entire dues by way of sale of mortgaged assets. Thus first and foremost we have to create tools which will enable us to have a better bargaining position with the Financial Institutions/ Banks.
Moreover whenever the Economy is not performing well and Bankers are struggling with large number of NPA accounts and high degree of provisioning then it is in the interest of the Lender also to welcome the Borrower's move for OTS.
Once the Borrower decides for One Time Settlement then it needs setting up of highly professional negotiating Desk for executing the OTS Plan.
We Render
- Services to create tools within the legal frame work to gain a higher bargaining position which indirectly enables the Banker to accept our offer.
- Services to structure the deal which is the most important aspect of any OTS exercise.
- Services to achieve the desired results under OTS, which is mutually beneficial to the Borrower as well as Lender as it saves time, money and energy which is otherwise lost in initiating recovery process and unnecessary litigation.
Banking relationship advisory is a specialized service that banks and financial institutions offer to clients to help them manage their banking relationships and improve their financial outcomes. The goal of this service is to build a long-term, mutually beneficial relationship between the client and the bank.
One of the key benefits of banking relationship advisory is that it provides clients with a dedicated point of contact within the bank who has a deep understanding of their unique financial situation. This can help clients to save time and money by streamlining their banking processes and providing them with expert guidance on financial matters.
Another benefit is that it allows clients to access a wide range of financial products and services, including investment management, credit and lending services, and risk management solutions. This can help clients to achieve their financial goals by providing them with the tools and resources they need to make informed financial decisions.
Overall, banking relationship advisory is a valuable service that can help clients to manage their relationships more effectively and improve their financial outcomes. Clients can gain a deeper understanding of their financial situation and access the resources they need to achieve their goals.
Here are some of the services that banking relationship advisory can offer:
- Financial planning and advice
- Cash management and treasury services.
- Credit and lending servicesy
- Investment services
- Risk management and insurance
Banking relationship advisory can offer a wide range of services to help clients manage their banking relationships more effectively. They can help clients achieve their financial goals and build stronger, more long-term relationships with them.