Forbearance agreements and loan restructure agreements are extremely similar. They are two stages of the same agreement and are aimed at providing a debtor with sufficient time and ability to pay off a certain debt. These agreements are most commonly carried out on property mortgages. A forbearance and loan restructure agreement, however, have some differences. The former involves clauses which prevent the property from being claimed by the creditor due to temporary or minor financial difficulties faced by the debtor. The loan restructure agreement, on the other hand, involves changing certain conditions in the agreement.
The loan restructuring is done to ensure that the debtor is not declared insolvent by a bankruptcy court. It involves changing the loan amount, or the period of payment or the rate of interest to suit the debtor. The creditor also ends up benefitting from the forbearance and loan restructure agreement since instead of being saddled with a debt not paid at all, he can get back at least some of the amount of the loan.
Forbearance and Loan Restructure Agreement
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