Guides / Career guides / Restructuring
Restructuring: banking when companies are in trouble.
Restructuring bankers advise companies that can’t pay their debts, and the lenders and investors who are owed money. The work is complex, legal and technical, and it’s one of the most respected training grounds in finance.
Last checked 15 November 2026
Company-side (debtor) advisory
Helping a struggling company renegotiate its debt, raise rescue financing or go through a court process such as US Chapter 11.
Creditor-side advisory
Representing groups of lenders or bondholders, helping them get as much value back as possible.
Restructuring or M&A?
| Compare | Restructuring | M&A |
|---|---|---|
| The work | Liquidity forecasts, debt capacity, recovery analysis, negotiations | Valuation, merger models, sale processes |
| When it’s busy | Counter-cyclical: busiest when the economy is weak or rates are high | Busiest when markets are strong |
| Skills you build | Credit, legal documents, capital structure | Strategic and valuation skills |
| Where people go next | Distressed and credit hedge funds, special situations, private equity | Private equity, hedge funds, corporate development |
Pay at the leading restructuring advisers is at the top of the banking range.
A typical day in restructuring.
A realistic junior day on a normal week. Live deals, results seasons and market shocks make it longer.
- 9:00
Update the company’s 13-week cash flow forecast with yesterday’s actual figures.
- 11:00
Call with lawyers about the terms of a proposed debt exchange.
- 13:00
Build a recovery analysis: what each group of creditors gets under three scenarios.
- 16:00
Prepare materials for a negotiation with a lender group.
- 20:00
Turn comments from the VP and send the final pages. Live cases can run very late.
The career ladder and pay.
| Level | Typical years | What you do | All-in pay |
|---|---|---|---|
| Analyst | 0 to 3 years | Cash flow forecasts, models, recovery analysis, presentations | $180k to $275k |
| Associate | 3 to 6 years | Runs the analysis and works directly with lawyers and creditors | $300k to $500k |
| Vice president | 6 to 10 years | Manages cases day to day | $500k to $850k |
| Managing director | 10+ years | Wins mandates and leads negotiations | $1m to several million |
Approximate all-in pay (base plus bonus) in US dollars at large firms in New York in recent years. London is usually 20 to 30% lower; smaller firms and other cities pay less. Bonuses swing with the market.
How recruiting works.
Restructuring teams hire through the main analyst programmes at banks that have them, and through their own internships at specialist advisers. Teams are small, so networking with people in restructuring specifically matters.
Interviews add debt and distress questions to the usual technicals. Read about one or two recent restructurings and be ready to explain what happened.
Who hires.
| Type | Examples | What it’s like |
|---|---|---|
| Specialist and elite boutique advisers | PJT Partners, Houlihan Lokey, Evercore, Lazard, Moelis, Perella Weinberg | The leading restructuring franchises, with small teams and complex cases. |
| Global banks | Some bulge brackets have restructuring or liability management teams | Often linked to leveraged finance. |
| Turnaround and advisory firms | Alvarez & Marsal, AlixPartners, FTI Consulting | Run companies through difficulty as interim managers and advisers. |
Firm names are examples, not a ranking or an endorsement.
Are you ready to apply?
Tick what you can honestly do today.
Your plan, step by step.
- 9 months before
Learn credit
Debt types, covenants, credit ratios and how bonds are priced.
- 6 months before
Follow cases
Pick two restructurings in the news and follow every step.
- 3 months before
Network with restructuring teams
They are small, so a personal contact can make a real difference.
- Interviews
Show judgement
Explain who you think has the strongest position in a negotiation, and why.
Where it leads.
Distressed and credit hedge funds
The most natural move: investing in the debt of struggling companies.
Special situations and private equity
Buying companies through or after a restructuring.
Private credit
Lending to companies, where understanding downside risk is key.
Myths and reality.
“Restructuring is depressing work.”
You’re helping save businesses and jobs; many people find it the most interesting work in banking.
“It’s only busy in recessions.”
Liability management and refinancing work keeps teams busy even in good years.
What to read.
- Distressed Debt Analysis by Stephen Moyer. The standard guide to distressed investing and restructuring.
- Bloomberg and Reuters restructuring news. Follow cases as they happen.
- Court filings for a major Chapter 11 case. First-day declarations explain how a company got into trouble.
What they ask in restructuring interviews.
Expect normal accounting and valuation, plus questions on debt and what happens when a company can’t pay it.
Basics Why does a company need restructuring?
Usually because it can’t meet its debt payments or will run out of cash, often after a fall in profits, a big debt maturity it can’t refinance, or a sudden shock. Restructuring changes the debt so the business can survive.
Credit What is the order in which creditors are repaid?
Broadly, secured debt first, then senior unsecured debt, then subordinated debt, then preferred equity and finally common equity. This is called the absolute priority rule or the capital structure waterfall.
Process What’s the difference between an out-of-court and an in-court restructuring?
Out of court, the company negotiates directly with creditors, which is quicker and cheaper but needs enough of them to agree. In court, such as US Chapter 11, a judge can bind dissenting creditors and the company gets protection while it reorganises, but it is slower and more expensive.
Technical What is DIP financing?
Debtor-in-possession financing: new loans to a company in Chapter 11, usually ranking ahead of existing debt, so it can keep operating during the process.
Technical How would you estimate recoveries for each creditor class?
Value the business (often at a distressed multiple or with a DCF), then distribute that value down the capital structure in order of priority. Each class recovers what is left when it’s their turn.
Fit Why restructuring rather than M&A?
Talk about liking complex, technical problems, negotiation and credit, and the fact that the skills are useful across market cycles. Mention a restructuring case you’ve followed.
The restructuring interview prep pack
Every interview question on this page with answers, the readiness checklist and your step-by-step plan, as a printable PDF.
Here it is.
Test yourself: restructuring
Questions from the Mandate app. Try each before you open it.
Compared with high-yield bonds, senior secured loans are usually…
Repaid first, at a lower rate. Senior secured debt ranks first and is backed by assets, so it is cheaper.
A revolving credit facility (revolver) works like…
A credit line you can draw, repay and redraw. It is used for working capital and liquidity, often undrawn.
How does a Term Loan B usually differ from a Term Loan A?
TLB is institutional with little amortisation. TLBs dominate leveraged buyouts, with most principal due at maturity.
Most leveraged loans pay interest as…
A floating base rate plus a spread. High-yield bonds, by contrast, are usually fixed rate.
Practise the debt technicals in the app.
The debt and leveraged finance unit covers capital structure, credit metrics and recoveries.