When you have to file for a bankruptcy, it's painful. You don't want to lose your business, but you also can't continue to go deeper into debt. The good news is that there are different options open to you. In some cases, you may be able to keep your business afloat.
With both Chapter 11 and Chapter 13 bankruptcies, it's possible to keep a business open while the owner restructures its finances. Chapter 11, specifically, is designed to help with the restructuring process, while Chapter 13 allows the individual to pay a monthly amount toward the elimination of debts for three to five years.
Chapter 7, on the other hand, means the end for your business in most cases. Chapter 7 bankruptcies require the liquidation of your business, which means that you'll sell assets that belong to the business and walk away without anything you'd need to keep the business operational.
Out of the two bankruptcy forms that could save your business, Chapter 13 is the least expensive, but there are limits. You can't have more than $1,184,200 of secured loans or $394,725 of unsecured loans and still qualify. Keep that in mind if you plan to keep your business and seek bankruptcy, because it may mean that Chapter 11 or 7 is the only real option.
The bankruptcy process is a little costly, and it can mean taking time to restructure your business, negotiate when possible and continue operations at the same time. It's complicated to do, but if you can pull it off, your business is likely to come out on top.