We model bargaining with a sovereign subject to a moral hazard problem. The country can implement a better economic policy which will increase its future revenues, but doing so comes at a personal cost to the sovereign. The lender can only observe imperfect signals of the country's policy choice and set debt forgiveness and the number of signals required indicating that the country has implemented the good policy. With imperfect signals, welfare reducing bargaining delay may occur. In some cases both lender payoff and total welfare may improve with less precise signals. We offer an explanation why sovereign debt restructuring, such as in the recent case of Greece, can take a long time and why lenders have to collect information on the country's progress during renegotiations.