Why You Can’t Restructure Your Debt on Your Own



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If your organization suffers under a heavy debt load, then you’ve probably thought about taking matters into your own hands by attempting restructuring on your own. While it’s technically possible to enter into negotiations with your lenders on your own, achieving a favorable result through self-representation is all but impossible.

This statement has nothing to do with how smart you are, how effective you are at negotiation, or how much time you can devote to working with your lender. Instead, it has everything to do with the fact corporate debt restructuring is a highly specializedfield composed of a variety of factors that are best embodied by professional turnaround companies.

For example, debt restructuring is a complicated process filled with many technical and legal factors that need to be taken into serious consideration. The exhaustive knowledge and professional sensitivity required to navigate this potential mine-field can only be developed by working in the field, day in and day out, for many years.

Debt restructuring can also be a very emotional process. Business owners are always too close to the proceedings to pursue them with the cool head and sense of objectivity necessary to acquire the results they desire. This emotional closeness can cause a business owner to feel paralyzed at the prospect of negotiating with their lender and to accept a less-than-ideal resolution simply to release the tension inherent in debating with their lenders.

At its heart, like all businesses, debt restructuring occurs on the person-to-person level. Success in negotiating a favorable restructuring plan often has as much to do with the relationship between the individual on each side of the table. If you’ve had a difficult time paying back your debtor, then there’s a good chance your relationship will already be strained. When you work with an experienced turnaround company, you benefit from the positive relationship that company has likely already developed with your lender through past cases working together.