At the Law Office of Steven Leahy we offer bankruptcy services. Bankruptcy is an important tool that can offer much needed relief for those facing harassment from the IRS. Here is a brief overview of the different types of bankruptcy.
Chapter 7 Bankruptcy- This is the most common method of bankruptcy. With this method the trustee liquidates any non-exempt assets held by the debtor and uses the proceeds to pay down as much debt as possible. The portion that can’t be paid is discharged. Individuals, corporations, and partnerships are eligible for Chapter 7.
Chapter 11 Bankruptcy- This method is mostly used by businesses and can be complicated. The business continues to function and maintain ownership of assets, and the business tries to work out a reorganization plan to pay off debts. The business has 120 days to create a plan.
Chapter 13 Bankruptcy- This is similar to Chapter 11, but for individuals. The debtor works out a 3-5 year repayment plan. Some of the debt may be discharged.
Get a further overview of bankruptcy in this article: http://money.howstuffworks.com/personal-finance/debt-management/bankruptcy1.htm