The great recession has led to many small business owners realizing that their attempts at starting their own business just are not going to work. Small businesses often depend on customers to spend their disposable income with the small businesses’ service or product.
Unfortunately, most of the disposable income in this country has evaporated. Chapter 11 bankruptcy is the chapter of bankruptcy that a business can file if it is still viable but yet has too much debt. The Chapter 11 can help those types of businesses reorganize. However, if someone has personally guaranteed the debts of the business and the business has too much debt then the individual owner can file a personal Chapter 7 bankruptcy if they pass the means test. If they do not pass the means test, then the individual can probably file a Chapter 13 and the corporation can file a Chapter 7 to shut the failed business down.