A ________ occurs when the terms of the obligation are altered so as to make the new terms less attractive to the debt holder than the original terms.

Question

Quizplus · Accepted Answer

This describes a restructuring, which involves changing the terms of the debt in such a way that the creditor is now getting a worse deal than they originally agreed to. This may be done in order to avoid default or bankruptcy, but it can still be detrimental to the creditor. A cross default refers to a situation where defaulting on one debt triggers a default on other debts, while a downgrading involves reducing the credit rating of an issuer or security. Repudiation refers to outright rejection of a debt obligation.

A ________ Occurs When the Terms of the Obligation Are