Legal Definitions - debtor rehabilitation

Definition: Debtor rehabilitation is the process of reorganizing a debtor's financial affairs to help them become financially stable and able to pay off their debts.

For example, if someone has a lot of debt and is struggling to make payments, they may file for bankruptcy and go through a debtor rehabilitation process. This process can involve creating a repayment plan, negotiating with creditors, and receiving financial counseling to help them manage their money better.

Debtor rehabilitation is important because it helps people get back on their feet financially and avoid falling deeper into debt. It can also help creditors recover some of the money they are owed, rather than having to write off the debt as a loss.