Reducing the burden of outstanding debts is an essential component of financial stability. Through debt restructuring, individuals and businesses can reduce monthly payments or modify current terms to manage their finances more effectively. This process may be advantageous during times of economic hardship or when unforeseen expenditures arise such that it becomes necessary for households to restructure their liabilities. By working with creditors towards a mutually beneficial resolution, borrowers can minimize the impact that defaulting on loans will have on both credit scores and overall interest charges; freeing up funds which could then be used for other necessities like food expenses or unexpected bills.