In a Chapter 11 bankruptcy, the individual or business filing bankruptcy (debtor) has the first opportunity to propose a reorganization plan—to reorganize the debtor’s operations and payment of debts. A Chapter 11 plan is an agreement between the debtor and its creditors as to how the debtor will operate and pay its debts going forward.

Chapter 11 plans often include downsizing of the debtor’s operations to reduce expenses, and renegotiation of debts. If the proposed reorganization plan is accepted by the court and the creditors, the bankruptcy process moves forward.

In Ohio, as in all states, Chapter 11 bankruptcy is governed by federal law, specifically the U.S. Bankruptcy Code. Under Chapter 11, both individuals and businesses can reorganize their debts and continue operations. The debtor usually has a 120-day exclusivity period to propose a reorganization plan, which may include strategies like downsizing operations or renegotiating debts to reduce expenses and make debt repayment more manageable. Creditors may vote on the plan, and if the required number of creditors agree, the plan can be confirmed by the bankruptcy court. If the plan is confirmed, the debtor will make payments according to the plan's terms. If the debtor fails to propose an acceptable plan, creditors or other parties in interest can propose a plan instead. The goal of Chapter 11 is to allow the debtor to restructure in a way that maximizes the return to creditors and preserves the going concern value of the debtor.