Find out what it takes to succeed in a debt restructuring role
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Debt restructuring is a complex process involving renegotiating the terms of existing debts to help companies and lenders face financial distress. As a job role within the advisory department of a financial services firm, the debt restructuring professional is responsible for advising clients on how to manage their debt, align liabilities with cash flow, and improve their overall financial health.
The primary responsibility of a debt restructuring professional is to assist stakeholders in recovering from unmanageable debt load. This involves analyzing the company’s financial position, the feasibility of different restructuring options, and developing and executing a restructuring plan. The restructuring professional must deeply understand financial markets, lending practices, and accounting principles to provide clients with the best possible advice.
Required Skills, Qualifications, and Experience in Debt Restructuring
Debt restructuring professionals must have strong analytical, communication, and negotiation skills. They must be able to analyze complex financial data, communicate their findings to clients and creditors concisely, and negotiate with stakeholders to achieve favorable outcomes and resolutions. They also need to have a solid understanding of financial modeling and valuation techniques to create restructuring plans that are both achievable and that stakeholders can agree to.
To become a debt restructuring professional, you typically need a bachelor’s degree in finance, accounting, or a related field. Many firms prefer candidates with a master’s degree in finance, business administration, or professional certifications, such as a Certified Public Accountant (CPA) or Chartered Financial Analyst (CFA). In addition, regions may have specific certification requirements such as Chartered Insolvency and Restructuring Professional (CIRP) or Certified Insolvency and Restructuring Advisor. Candidates should have at least 3-5 years of experience in financial analysis, accounting, or investment banking.
What Tools are Used in Debt Restructuring?
Debt restructuring professionals use a variety of tools and software to perform their jobs. They use financial modeling software to create and evaluate restructuring plans, spreadsheet software like Excel to analyze financial data, and communication tools such as email, video conferencing, and instant messaging to collaborate with clients and other stakeholders.
A Typical Day in Debt Restructuring
A typical day for a debt restructuring professional involves compiling and analyzing financial data, developing restructuring plans, and communicating with clients and other stakeholders. They regularly meet with clients, lenders, and other advisors (e.g., insolvency and restructuring lawyers), map out options, monitor milestones, and conduct other recovery actions.
Professionals regularly test assumptions when determining the expected outcomes under different restructuring options. Their mandate may include conducting asset sales to recover equity for creditors and companies or reorganizing companies to satisfy stakeholders.
What do Debt Restructuring Professionals Earn?
Debt restructuring professionals can expect to earn competitive salaries relative to other professionals in the financial services industry. The compensation package for this role reflects skills required beyond entry-level positions in finance, accounting, or investment banking. It is comparable to other specialized roles within the advisory department of professional financial services firms. However, compensation can vary widely depending on the firm, the candidate’s qualifications and experience, and other factors such as location and industry specialization.
Debt restructuring is a challenging and rewarding job role within the financial services industry. As a debt restructuring professional, you’ll be able to help companies improve their financial health and achieve their long-term goals. If you have strong analytical, communication, and negotiation skills, and are passionate about finance and accounting, debt restructuring may be the right career path for you.
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