What Needs to be in a Plan of Reorganization?

No Comments » | Posted by Joseph Carr-Boyd
Oct 24 2010

A reorganization plan, or formally, Plan of Reorganization, is a requirement of Chapter 11 bankruptcy. This bankruptcy status can be used by businesses or individuals in financial trouble, and must include the terms in which to make payments to creditors, and details that lay out the financial situation.

The Plan of Reorganization must include: – A catalog of monies owned, and to which creditors – An inventory of all assets – An account of entire updated financial situation – Present day income statements – Present day expense statements

The Plan or Reorganization should be organized in an easy to understand format. In the catalog of monies owed, classify each creditor by the following: secured, unsecured, and priority debts. Priority debts are things like taxes or administrative costs. Unsecured debts are things like credit cards, and secured debts are things like mortgages and car loans. It is very important that any required revisions of the plan of reorganization follow the bankruptcy code.

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