Troubled Debt Restructuring, or TDR, is a form of concession or discount on debt provided by the lender to the borrower, after reviewing his repayment capability and financial hardships.
Such discounts on debts are offered on the loans that the borrower is unable to repay on time. Many times, troubled debt restructuring is given on loans that aren’t past due, but are about to happen, in order to get the loans back on normalcy.
Lenders provide debt restructuring to borrowers in two ways. In first case, a valuable asset of the borrower is secured by the lender much before the loan is eradicated. Later, when the borrower fails to repay the loan amount, his asset is sold or used by the lender, to get the money or recover for the losses.
This type of Troubled Debt Restructuring is not different [...]