Average Time Taken to Restructure Debt

Abstract

A country resorts to debt restructuring when its public debt is unsustainable. Debt restructuring involves a substantive default on existing debt contracts. This can occur through an orderly or disorderly process. An orderly default (pre-emptive default) is when (1) a country does not miss a debt service payment or (2) misses a debt service payment after securing consent from creditors to do so. A disorderly default is when a country misses a debt service payment and fails to secure consent from creditors to do so. This infographic shows that countries who restructure their debt after a disorderly default takes a longer time to restructure debt, as opposed to countries that restructure debt after an orderly default.