Although the team strives to create bug free code, there are times when defects or bugs are introduced during the development process.  When planning an iteration, open defects should be prioritized and planned into each iteration along with new features.  The team should collaborate with the testers and product owners to determine the overall impact of the defects and their priority for fixing.  If a defect is causing a stoppage in testing and there is no workaround, it should be high on the list.

During iteration planning, whether or not a team breaks down a defect into tasks varies. Some organizations treat them exactly the same as new features. Defects are estimated, broken down into tasks, and tests are created to validate they are resolved.  Other teams may choose to not create tasks. The team should decide collectively how they want to approach defects for the project or product, and plan them accordingly.