A business should consider bankruptcy when it has high debt and can see that it will soon be in a position where it will not be able to function and pay for all expenses to operate. Many businesses did this during Covid since they were not able to bring in sales and income. Common scenarios: If a business has one very large account that brings in most of their sales and they lose the account. If an industry changes dramatically and there is no longer a need for a business's service. For example, the printing business became quite obsolete after the internet became the new way to advertise.