Bankruptcy Unit actions vary depending on the type of bankruptcy filed by the taxpayer. Chapter 7 - Taxpayer liquidates most assets and liabilities. Chapter 11 - Business reorganization. Taxpayer makes payment plan to pay off debt over 6 years. These accounts are followed-up by collections for adherence to the bankruptcy plan.
Taxes are collectible after the bankruptcy is discharged.
Chapter 13 - Taxpayer is generally a wage earner with a regular income. A payment plan is set up and monitored by a trustee. Taxes are collectible after the bankruptcy is discharged. Most of the other types of bankruptcy chapters are seldom used. Chapter 9 - This is for Municipalities.