Troubled Debt Restructuring

Troubled Debt Restructuring (TDR) is a financial process where a borrower who is struggling to meet their debt obligations negotiates new terms with their lender. This can involve reducing the amount owed, lowering interest rates, extending the repayment period, or changing due dates. The goal is to help the borrower manage their debt more effectively and avoid default, while also providing the lender with a better chance of recovering the funds. TDR often signals that a borrower is facing financial difficulties and is an important aspect of credit risk management in finance.