Of the many methods of debt relief available to consumers, debt restructuring in SA is probably one of the more savvy and practical. A clever way to relieve financial strain, debt restructuring in SA is a simple way to increase the time you have to pay off your debt while reducing monthly payments.
Unlike debt restructuring for an individual, corporate debt restructuring is governed by The Companies Act No 71 of 2008, enacted in 2011. Since its enactment, companies have been enjoying similar debt restructuring benefits as natural persons, meaning that when a company finds itself over-indebted, it too has the option of debt restructuring.
Corporate debt restructuring in SA involves reducing the payments due and increasing the time companies and businesses have to pay the debts through negotiations with creditors, thus allowing the company a chance to become profitable again whilst simultaneously still meeting debt obligations.
Since the inception of the act, more than 400 businesses have applied for corporate debt restructuring and it is clear that companies needed this remedy in the current economic climate. In South Africa at present, there are roughly 84 practitioners that can help a company with debt restructuring.
Businesses that cannot afford their monthly debts and are not seeing a solution that will keep them solvent in the next six months should seriously consider corporate debt restructuring. Although there are minor differences between corporate debt restructuring and debt restructuring for natural persons, the aim remains as always to find a means to pay debts in a more manageable way.
Companies should not give up because debt has swallowed up their profit; instead they should consider corporate debt restructuring and find a way to negotiate with their creditors today.