To qualify for debt rescheduling, the debtor must be in a situation of imminent default. Any debt service related to loan or guarantee contracts incurred after the cut-off date is normally not eligible for rescheduling. This is to encourage creditor countries to continue to lend to a debtor without fear that the new credits will be rescheduled. Longer grace and repayment periods are standard for lower income debtors. Interest is paid on all rescheduled amounts, even during the grace period, at rates no less favorable than those in the original contracts.
Payments falling due following the consolidation period remain due on their original schedule.
Countries may return to the Paris Club for repeated reschedulings if necessary. Rescheduling terms are arrived at in discussions between the representatives of debtor and creditor governments participating in the Paris Club, based on the IMF's analysis of the debtor's capacity to pay during the IMF program period. The United States and other participating creditor countries are not legally bound to implement the terms of the Agreed Minute, but are expected to do so. Creditor countries implement the terms through bilateral debt rescheduling agreements between them and the individual debtor countries. A rescheduling does not reduce debt.