Editing Debt restructuring (section)

== Motivation ==
Debt restructuring involves reduction of debt and an extension of payment terms and is usually less expensive than [[bankruptcy]]. The main costs associated with debt restructuring are the time and effort spent negotiating with bankers, creditors, vendors, and tax authorities.

In the United States, small business bankruptcy filings cost at least $50,000 in legal and court fees, and filing costs in excess of $100,000 are common. By some measures, only 20% of firms survive [[Chapter 11, Title 11, United States Code|Chapter 11]] bankruptcy filings.<ref>Buljevich, Esteban C.,''Cross Border Debt Restructuring: Innovative Approaches for Creditors, Corporate and Sovereigns'' {{ISBN|1-84374-194-6}}</ref>

Historically, debt restructuring has been the province of large corporations with financial wherewithal. In the [[Great Recession]] that began with the [[2008 financial crisis]], a component of debt restructuring called debt mediation emerged for small businesses (with revenues under $5 million). Like debt restructuring, debt mediation is a business-to-business activity and should not be considered the same as individual debt reduction involving [[credit card]]s, unpaid taxes, and defaulted mortgages.

In 2010 debt mediation has become a primary way for small businesses to refinance in light of reduced lines of credit and direct borrowing. Debt mediation can be cost-effective for small businesses, help end or avoid litigation, and is preferable to filing for bankruptcy. While there are numerous companies providing restructuring for large corporations, there are few legitimate firms working for small businesses. Legitimate debt restructuring firms only work for the debtor client (not as a debt [[collection agency]]) and should charge fees based on success.

Among the debt situations that can be worked out in business-to-business debt mediation are: lawsuits and judgments, delinquent property, machinery, equipment rentals/leases, business loans or mortgage on business property, capital payments due for improvements/construction, invoices and statements, disputed bills and problem debts.