You may run a small business, that is, or is not, incorporated.
If it is a corporation, the corporation has to file for Chapter 11 to get bankruptcy relief.
But, you do not have to be a corporation to file for Chapter 11.
You may run a store, own and rent a bunch of houses, or any other business, in your own name.
You can still file Chapter 11.
Now, it will include all of your debts, and all of your property.
That is, though you may run the business books separately and regard it as separate from you, it is not legally separate unless it is a corporation, limited liability corporation or partnership.
So your individual Chapter 11 includes your furniture and clothes and house and car as assets, and includes your mortgage and electric bill and car insurance as expenses.
You should file a separate budget for the business, with its income and expenses and one for you, with your income, the net from the business, and whatever other income you have, and your personal expenses.
Why file Chapter 11 bankruptcy?
If you owe more than the debt limits, you cannot file Chapter 13.
In Chapter 11, you are your own trustee, so you continue to operate in the ordinary course of business. Anything outside the ordinary course of your business requires court approval.
You have the United States Trustee overseeing your case, but you are not paying a Chapter 13 trustee.
The U. S. Trustee gets monthly financial reports from you, and duplicate original copies of your monthly bank statements, and you pay them a quarterly fee. But they are not getting your plan payments to disburse to creditors.
In Chapter 13, you have 15 days to file a plan. In Chapter 11, usually 120 days to file a plan.
In Chapter 13, you have to start making payments right away, not so in Chapter 11.
So, Chapter 11 gives you a breathing spell from most of your debts.
If your business is renting other homes, you can re-write the mortgages on those homes, down to the value of the home. And the plan can change the interest rate and other terms of the mortgage.
You can return property that you do not want to keep to secured creditors, but you do not have to lose anything by filing Chapter 11.
You also are not bound by the 5 year limit imposed on Chapter 13 plans. If you need more time, you can take it.
If, and I say if, there is a level at which your business is profitable, Chapter 11 offers a way to shed debt, and the debt service, that may mean the difference between a viable business and one that goes under.