A business that has been forced to file for bankruptcy will likely declare Chapter 7, Chapter 11, or Chapter 13 bankruptcy. Chapter 7 is open to both individuals and businesses, making it an attractive option for small business owners who need to combine their professional and personal debts. Chapter 13, meanwhile, provides business owners with the option of protecting business assets and continuing operations while reorganizing debts and devising a new repayment plan.
Business owners can also file for Chapter 11 bankruptcy, though it is a comparably complex process that requires the oversight of a skilled financial professional. The complexities of filing for Chapter 11 can be partially attributed to the surplus of paperwork and business records that must be gathered. Like Chapter 13, this filing may be made with the intention of continuing operations rather than going out of business. If its ownership so chooses, the company can sell certain assets to offset debts and downsize the organization.