Video: What is a re-organization plan?
When a person or a business entity files a chapter 11 bankruptcy proceeding, the ultimate goal of that chapter 11 case is for the debtor, the entity that filed, to prepare and file a plan of reorganization. That plan will restructure the debtors debts, it will treat, for example, secure creditors dealing with their collateral and the value of their collaterals. It will also deal with priority claims such as tax obligations, which you are permitted to spread the repayment of those tax obligations over five years from the date you filed. It will also deal, for example, with your general unsecured creditors where typically in a plan of reorganization you're paying pennies on the dollar to your general unsecured creditors.