There are two types of proceedings available for corporate bankruptcy: Chapter 7 and Chapter 11. Chapter 7 liquidates the assets, while Chapter 11 essentially reorganizes the business and allows it to continue operation. Corporations, limited liability companies, partnerships and sole proprietorships are all eligible to file for Chapter 7. However, it’s mostly a tool used by sole proprietors because once they pay their creditors, they will receive a discharge. Receiving a discharge means that the sole proprietor would no longer be liable for the repayment of business debts, even if they signed a personal guarantee.  Meanwhile, corporations, LLCs, and partnerships cannot receive a discharge like a sole proprietor could. In this case, if you’ve signed a personal guarantee, creditors may still come after your personal assets to try and satisfy your debt.  Chapter 11 bankruptcy allows a company to continue business operations while reorganizing debt. This is generally the best option when the company is not entirely underwater and can still be turned into a viable, money-generating business with some additional help.  A Chapter 11 business bankruptcy filing is a good option for companies that have regular revenues but are struggling to repay their debts. Should you go with this option, the court will need to review and approve your reorganization plan before it goes into effect and helps with repayment of debts. Chapter 11 also leaves room to negotiate with creditors. For example, instead of a typical five-year repayment plan, the court may allow you to spread out the payments over 20 years instead. The goal of Chapter 11 bankruptcy is to provide businesses the opportunity and resources to get them back on their feet.