As a practical matter, the IRS will rarely make such an effort. To be effective, you must implement these procedures before you enter into the transaction with the director or employee. Your nonprofit would be wise to use these procedures to establish the compensation of its keep employees and directors.
Chapter 11 Bankruptcy. Chapter 11 bankruptcy is intended primarily for the reorganization of businesses with heavy debt burdens, most often associated with corporations but available to small businesses as well. Although it's uncommon, consumers may file for Chapter 11 in some rare instances.
Most debts can be eliminated in a Chapter 7 bankruptcy. Legal Aid does not do Chapter 13 bankruptcies. This type of bankruptcy allows a debtor to repay debts at a lower rate is useful if you are delinquent on your home payments or car payments and want to become current. Clients must be less than 125% of poverty level.