Back in September 2015, Puerto Rico's top economic officials announced a debt recovery plan, stating that the country would need about $14 billion of debt relief over the next five years in order to help the U.S. territory to revive its economic growth and reduce its vast debt.

As it turns out, the estimates were far too optimistic.

According to The New York Times, officials in the Latin American U.S. territory stated on Monday that it now expects creditors to give the country a $16 billion break instead, as the financial situation of the island territory turned out to be far worse than expected.

Puerto Rico's officials further stated that they had run updated forecasts for the next 10 years as well. The results of the 10-year forecast were not very encouraging, as the officials stated that without debt relief, the financial gap could balloon to a very hefty $24 billion.

Apart from the announcement over the territory's impending fiscal gap, senior officials have also warned that there is a very real possibility of widespread defaults occurring in June if the commonwealth is unable to find a common ground with its creditors, reports CNBC News.

Melba Acosta Febo, the chairwoman of the Government Development Bank, believes that with the territory's current state, a restructuring with its creditors is in order.

"We expect to sit with our creditors shortly and put forth a comprehensive restructuring proposal. (The proposal) would include responsible steps by Puerto Rico to manage its economy, but it also includes a comprehensive adjustment of its debt, that reflects the commonwealth's actual capacity to pay its creditors over the long term," she said.

With weak revenue and with its ability to borrow money shuttered, the island territory's cash reserves have been drying up. CNN Money states that the limitations in the country's cash are so bad, even the commonwealth's prison system has not been able to pay the vendor that supplies food to the territory's inmates.

Apart from this, the salary of a number of special education teachers in the territory has been temporarily suspended. Tax refunds across the country have also been delayed.

The Obama administration has stated that it aims to give the island territory the same bankruptcy rights as other U.S. states through a law known as Chapter 9. If granted, Chapter 9 would enable Puerto Rico to shed or restructure some of its debts under the supervision of a judge.

Puerto Rico's financial troubles have become a pivotal aspect in the campaign of a number of presidentiables, with Jeb Bush and Hillary Clinton stating that Puerto Rico must be granted Chapter 9 rights.