Restructuring of debts refers to

A. Swapping less interest loans with more interest loans

B. Modification of the terms of a loan to debtor who could default on payments

C. Closing all outstanding loans

D. Going for more and more borrowings

Answer: Option B

Solution(By Examveda Team)

Debt restructuring refers to modification of the terms of a loan to provide relief to a debtor who could otherwise default on payments. The restructuring may involve extending the period of repayment, reducing the total amount owed, or exchanging a portion of the debt for equity in the debtor company. Also see extension, composition, debt-for-equity swap.