This research paper on the restructuring of Russian sovereign debt was written under the aegis of the International Finance Seminar at Harvard Law School in 2004. The problem of excessive public debt is still prevalent in 2013, even developed countries such as the United States, Japan, and members of the European Union are experiencing severe hangovers after the financial crisis which showed the shortcomings of living in debt at the expense of future generations and creditors. Budget cuts and austerity steps have became household terms in many parts of the world. The experience of Russian sovereign debt restructuring in 1990s and early 2000s presents an interesting case for study. Russian external debt came down from the unsustainable burden of the early 1990s to a record low level of just 11% of GDP in 2012. This miracle can be accredited to high oil prices (which jumped from approximately US $20 per barrel in 1992 to almost US $100 per barrel in 2008), benefiting Russia greatly as one of the largest hydrocarbon exporters in the world, and the conservative spending policy of the Russian finance ministry which remembered well the huge budget deficits of 1990s.