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Business bankruptcy is very similar to personal bankruptcy from the aspect that the amount that you owe on your monthly debts is greater than the amount of money you have coming in. It is really a very simple formula. Depending on how the business is set up (i.e., limited liability corporation, S-type corporation, partnership, sole proprietor, etc) will dictate whether it is just the business that is in trouble if you decide to file for bankruptcy, or if your personal assets are also at risk. The common goal of business bankruptcy or personal bankruptcy is the same, which is to get out from under a seemingly overwhelming ton of debt, which far outweighs the amount of revenue that the business has coming in or via accounts receivable. But bear in mind that business bankruptcy should be the last resort course of action, used only after you have thoroughly investigated all bankruptcy options and bankruptcy alternatives. For business bankruptcy, there are two primary types -- Chapter 7 bankruptcy and Chapter 13 bankruptcy. The type that is right for you, if bankruptcy is your best or only option, will heavily depend on your business setup. Chapter 7 bankruptcy is a federal bankruptcy and may have advantages for you since it typically will NOT require the liquidation of the business assets or the business itself. The good news with this type of bankruptcy is that your creditors are put "at bay", although they still need to be paid for outstanding balances. This way the business can recover from the indebtedness and continue to pursue a profitable venture. But any decision-making in this regard will require the approval by the federal court, which will act according to the bankruptcy laws in your state. Another possible option is Chapter 11 business bankruptcy, which again will not require the business to liquidate its assets. Arrangements are made with the creditors to get them paid back, although repayment is setup to reduce the monthly amount owed (sometimes in exchange for interest), which can allow the business to recover and return to profitability. The law is very specific in regard to business bankruptcy, and this should not be attempted on your own. You should talk with a bankruptcy lawyer in your state who can talk to you about what options and alternatives may exist. Remember, bankruptcy will remain with the business for many years, even after the business has recovered, so bankruptcy should be a last resort if at all possible. A commonly asked question today is, what exactly comprises bankruptcy law? This question can not be answered in one sentence. But if we were to simplify matters, then we would say that it is that branch of the law that concerns those people who have had to face financial failure. This occurs when he or she is officially not able to pay off the money that he or she owes, for whatever reason. Even though this may be asked for by those want payment, at least in part, of what is owed to them by someone who has fallen on hard times. More often than not, the person who is facing financial ruin files for bankruptcy. Now, what these laws deal with is settle the debts with those who are owed money, often a small part of the total owed. It also gives the non-payer a second chance since the law frees him of most of the debt that is to be paid. How exactly is this achieved? Well the answer is simple - this is where the distribution of the ‘non-exempt’ assets comes into play. Also, the person going into bankruptcy does not have any control over his available funds. During the course of the whole action, the person who is in debt is also shielded from further collection action by disallowing the creditors to sue or attempt to collect the entire debt. However, many often pretend to be in a bad way just to escape paying off the money that is owed, even though one has the means to do so. Another deception would be receiving goods that one has no intention of paying for. Many use loopholes to get their business done that cannot always be declared as illegal but are not exactly legal or ethically right. This is similar to tactical bankruptcy which is used for an individual’s own benefits and which is not against the law specifically, but can prove to be dangerous. Today, people face financial devastation more often than in earlier years. Companies do not make the grade, so they file for bankruptcy. Sometimes these cases are categorized. Today, however, they are not treated in a different manner. They are not made to undergo intense scrutiny in one area when the reason of the bankruptcy is in a different area. This only results in a waste of time for both the parties. 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