1. Start by Identifying the Debtor and Bankruptcy Chapter
The first question is who will file. A sole proprietor and a separate corporation or LLC do not enter bankruptcy in the same legal capacity, and the available chapters differ.
Business Structure Changes the Filing Path
| Debtor | Common Federal Options |
|---|---|
| Individual or sole proprietor | Chapter 7, Chapter 11, or Chapter 13 may be available if eligibility requirements are met. |
| Corporation or LLC | Chapter 7 may be used for liquidation, while Chapter 11 may provide a reorganization path. |
| Partnership | Chapter 7 or Chapter 11 may apply depending on the objective and eligibility. |
Individual or sole proprietor
- Common Federal OptionsChapter 7, Chapter 11, or Chapter 13 may be available if eligibility requirements are met.
Corporation or LLC
- Common Federal OptionsChapter 7 may be used for liquidation, while Chapter 11 may provide a reorganization path.
Partnership
- Common Federal OptionsChapter 7 or Chapter 11 may apply depending on the objective and eligibility.
The Chapter Determines What Comes Next
- Chapter 7 focuses on liquidation, and a corporation, LLC, or partnership does not receive a Chapter 7 discharge.
- Chapter 11 can support reorganization, including specialized procedures for eligible small business debtors.
- Chapter 13 is limited to eligible individuals with regular income, which can include qualifying sole proprietors.
2. The Petition Starts a Federal Bankruptcy Case
A voluntary case begins when the debtor files a petition with the bankruptcy court. The required forms then depend on whether the debtor is an individual or a separate business entity.
Official Forms Depend on the Debtor
- Individuals and sole proprietors generally use the 100-series Official Bankruptcy Forms.
- Corporations, partnerships, and LLCs generally use the 200-series forms for non-individual debtors.
- Related preparation issues may also overlap with a bankruptcy filing review.
Schedules Have Federal Filing Deadlines
- Rule 1007 generally requires many schedules and statements with the petition or within 14 days after filing.
- The court may extend certain filing periods for cause under the Bankruptcy Rules.
- Local rules and case-specific orders should be checked before calculating due dates.
3. Assets, Debts, and Financial History Must Be Disclosed
Bankruptcy for business owners requires a clear picture of property, liabilities, and specified prepetition activity. The schedules and Statement of Financial Affairs organize that information for the court, trustee, and creditors.
Assets and Creditors Are Reported by Category
- Real estate, equipment, inventory, accounts, contract rights, and other interests may require disclosure.
- Secured, priority, and general unsecured claims are reported under different schedules.
- Known creditors and required addresses should be listed accurately.
The Statement of Financial Affairs Looks Back
- Required disclosures may cover income, transfers, payments, lawsuits, and other financial activity.
- Individual and non-individual forms use different questions and lookback periods.
- Transactions involving insiders or particular creditors may receive closer scrutiny under bankruptcy law.
4. Chapter-Specific Filings Change the Requirements
The filing package does not end with the same documents in every case. Plans, statements, and operating reports depend on the chapter and debtor type.
Reorganization Cases Require Their Own Filings
- Chapter 11 generally involves a plan addressing creditor treatment and the debtor’s financial structure.
- Eligible small business debtors may use specialized Chapter 11 procedures, including Subchapter V.
- Related planning may overlap with insolvency and reorganization issues.
Individual Chapters Have Different Documents
- A Chapter 13 debtor must file a plan with the petition or generally within 14 days under Rule 3015.
- A Chapter 7 individual may need a Statement of Intention concerning certain secured property.
- These requirements do not automatically apply to a corporation, partnership, or LLC.
5. Postpetition Duties Can Continue
Filing the petition does not end reporting obligations. Chapter 11 business cases can require continuing financial information, operating reports, and compliance with court or trustee requirements.
Small Business Chapter 11 Adds Reporting Duties
- Qualifying small business and Subchapter V cases carry additional financial-document and reporting requirements.
- Operating information may need to be filed while the reorganization remains pending.
- Corporate debtors may also face issues addressed in corporate insolvency matters.
Corrections May Require Amended Filings
- Newly identified assets or errors in filed papers may require amendment under applicable rules.
- Reporting duties vary by chapter, debtor type, court orders, and local requirements.
- Material omissions or false statements can lead to serious case consequences.
6. Frequently Asked Questions
Can an LLC owner file Chapter 13 for the LLC?
No. Chapter 13 is available to qualifying individuals, not to an LLC itself. An owner may have separate personal bankruptcy options depending on personal liability and eligibility.
Can a corporation receive a Chapter 7 discharge?
No. Chapter 7 discharge is available only to individual debtors. A corporation may use Chapter 7 to liquidate, but the entity does not receive a discharge under section 727.
Does a small business have to use Subchapter V?
No. Subchapter V is an elective Chapter 11 framework for eligible debtors. Traditional Chapter 11 may remain available depending on eligibility and case objectives.
Can a business keep operating after filing bankruptcy?
It may in Chapter 11. A debtor in possession generally continues operations unless a trustee is appointed or the court orders otherwise, subject to Bankruptcy Code requirements.
7. Review Bankruptcy Filing Requirements with SJKP
SJKP’s attorneys can review the business structure, debtor identity, available chapters, schedules, creditor classifications, financial disclosures, and postpetition requirements. The firm can also assess which federal filing path fits a proposed liquidation or reorganization.
02 Oct, 2026
