The purpose of corporate rehabilitation proceeding is to efficiently rehabilitate debtors who are faced with likelihood collapse due to financial difficulties, and their businesses through coordination of legal relations among interested persons (excerpt from Article 1 of the Debtor Rehabilitation and Bankruptcy Act).

A rehabilitation proceeding begins when the court and creditors believe that continuing the business will create more value than liquidating the business at the outset. In such rehabilitation proceeding, a debtor may, upon consent of creditors, repay its debt in installment typically over 10 years in accordance with a rehabilitation plan under the direction of the court. Recently, more debtors are discharged early. To increase chance for early discharge, it is important to consult with experts with depth of knowledge and experience from the out set.