Restructuring and bankruptcy are two different processes, which are designed to deal with companies' financial problems, but are used in different situations and for different purposes.

The main objective of the restructuring is to avoid bankruptcy by entering into an arrangement with creditors and carrying out specific recovery actions, which may include: changes in organisational structure, operational processes, cost reduction, renegotiation of agreements with creditors. Its implementation should be considered if the company still has the potential to regenerate, the debts are controlled to the point where there is a possibility to restructure them and if the company has a strategy to improve its financial performance.

The main premise of bankruptcy, on the other hand, is the lack of prospects for continued operations, and in the course of it, in principle, the sale of assets and the winding up of the business takes place. Its implementation should be considered when the company has neither the capacity nor the ability to pay its debtsThe debt burden is not sustainable, nor is there any prospect of improvement in the financial situation, or when the corrective measures taken do not have the desired effect and the debt is mounting.

Wybór między restrukturyzacją a upadłością zależy od analizy konkretnej, indywidualnej sytuacji finansowej przedsiębiorstwa. If there is a chance of improvement and viable rescue plans, restructuring is worth considering. Conversely, however, if the company is in serious trouble and there is no prospect of a rebound, bankruptcy may be a necessity. In both cases, it is advisable to seek legal and financial advice before making a decision.