Plans frequently are compromise settlements , extension agreements or liquidating plans . The plan is mailed to creditors with a ballot for creditors to indicate their consent. If consent is received from creditors holding in aggregate a requisite percentage of the debt, the plan becomes effective. CMA handles distributions to creditors provided under the plan. Through a successful plan, a debtor company gets relief from its unsecured trade debts.
Creditors receive the payments they agreed to accept in exchange for satisfaction of their claims.
Through their voluntary cooperation with the process and the successful rehabilitation of the debtor company, creditors preserve a customer for their goods or services.