This term refers to a Plan in a Chapter 13 case where a debtor is allowed to keep property, make adjustments to debts according to the law and pay the adjusted debts over time. Sometimes the terms “Reorganization” and “Chapter 13” are used interchangeably. Reorganization may also refer to a Chapter 11 case which can be filed by business entities and by individuals.

The Chapter 11 Reorganization process is far more complicated and expensive so it is typically only used by individuals who do not qualify for Chapter 13 because their debt amounts exceed the jurisdictional limits for Chapter 13.