Declaring bankruptcy is dependent on the extent of debt and the long-term economic prospects of your come company, but some pros of declaring bankruptcy include: Creditors must stop collection efforts immediately, pending further order of the Bankruptcy Court. The business is able to continue to operate under current ownership and management but under the Supervision of the Bankruptcy Court. As a debtor-in-possession, the business can borrow money on better terms. The business can be relinquished from burdensome leases and other one-sided contracts. The business may be able to sell previously encumbered assets to raise capital.