Can my LLC or corporation file Chapter 13?

No. The District of Arizona's court pamphlet states that corporations, partnerships and LLCs are not eligible for Chapter 13 and do not get discharges. Chapter 13 is described in court materials as a voluntary repayment plan for individuals with regular income. An owner may still have their own individual options, which is a separate question from what the company can do.

If my company files, does that deal with debts I guaranteed?

Not by itself. A company's case addresses the company's liability. Where you signed a personal guarantee, the lender commonly has a right to payment from you as well, and the Code treats a claim as a right to payment whether or not it has been reduced to judgment (11 U.S.C. § 101). The personal guarantees guide under this pillar covers that in detail.

Does the means test apply if most of my debt is business debt?

The dismissal path court instructions describe applies where your debts are primarily consumer debts — debts incurred primarily for a personal, family or household purpose. A debt profile dominated by business obligations therefore sits differently from a household one. The classification is fact-specific and worth checking with an attorney rather than assuming.

What does it cost to file?

A Chapter 7 petition carries a $245 filing fee (28 U.S.C. § 1930(a)(1)(A), (f)(1)), a $78 administrative fee (Bankruptcy Court Miscellaneous Fee Schedule, Item 8), and a $15 trustee surcharge (Bankruptcy Court Miscellaneous Fee Schedule, Item 9). A Chapter 13 petition carries a $235 filing fee (28 U.S.C. § 1930(a)(1)(B)). Entity cases under other chapters have their own fees; check your court's schedule.

Do I have to have a lawyer?

A corporation, partnership or LLC does: courts require entities to be represented by an attorney, not by a non-lawyer officer. An individual may file without one, and some courts publish pro se guides for that purpose. Court materials still say you should have an attorney review your decision to file and your choice of chapter.

Will filing stop a garnishment on my wages?

Filing generally triggers the automatic stay. While the stay is in effect, court guidance describes creditors as unable to bring or continue lawsuits, make wage garnishments, or make telephone calls demanding payment. There are exceptions and a creditor can ask the court for relief from the stay, so the effect in a particular case is not automatic in every respect.

Guides

Businesses and bankruptcy: how business debt fits into a case

Most people searching for business bankruptcy are individuals, not companies. A corporation, LLC or partnership files its own case on separate forms and, courts note, does not receive a discharge or qualify for Chapter 13. A sole proprietor's business debt sits inside their personal case. Which path fits turns on how the business is structured, who is personally liable, and whether it still trades.

Key points

The Bankruptcy Code treats a human being and a company as different debtors, with different chapters and different forms available to each.
A sole proprietorship is not a separate legal entity, so its debts are listed on the owner's individual petition.
The District of Arizona's court pamphlet states that corporations, partnerships and LLCs do not receive discharges and are not eligible for Chapter 13.
Where an owner personally guaranteed a business loan, the lender commonly has a right to payment from the individual as well as the company.
Whether your debts are primarily consumer debts changes which Chapter 7 dismissal path applies, which matters a great deal to business owners.

If you own a business, or used to, the word "bankruptcy" is doing two jobs at once: what happens to the company, and what happens to you. Those are separate questions with separate answers, and mixing them up is the most common reason people read the wrong page. This hub explains how the area is organised and points you to the guide that matches your situation.

What does this part of bankruptcy cover?

Business bankruptcy is not a single thing, and most people who search for it are individuals rather than companies. This pillar covers the places where business debt and a personal bankruptcy case meet: a small-business owner looking at Chapter 7, someone who signed a personal guarantee on a business loan, a sole proprietor whose business debt sits alongside household debt, and a person filing after a business has already closed.

The Bankruptcy Code treats a human being and a company as different kinds of debtor. The term "person" includes individuals, partnerships and corporations (11 U.S.C. § 101), but the chapters open to each differ. Chapter 13 is described by the courts as a voluntary repayment plan for individuals with regular income (Bankr. E.D. La. official guidance — Chapter 13 Form Packet), and the District of Arizona notes that corporations, partnerships and LLCs are not eligible for it and do not receive discharges. The four guides under this pillar each take one of those situations.

How do you know which of these applies to you?

Three questions usually sort it out. First, how is the business structured? A sole proprietorship is not a separate legal entity, so its debts are the owner's own debts and appear on an individual petition. A corporation, LLC or partnership is a separate debtor and files on the non-individual forms — the 201, 206 and 207 series rather than the 101, 106 and 107 series used by individuals (Bankr. S.D. Iowa official guidance — Instructions - Bankruptcy Forms for Non-Individuals).

Second, did you sign personally? Where an owner guaranteed a business loan, the lender commonly has a right to payment from the individual as well as the company; the Code defines a claim broadly as a right to payment, whether or not it has been reduced to judgment (11 U.S.C. § 101).

Third, are you still trading? A self-employed debtor who incurs trade credit in producing income is "engaged in business" under the Code (11 U.S.C. § 1304).

What do these paths have in common?

More is shared than differs. Every case begins with a petition filed in the bankruptcy court, and federal courts have exclusive jurisdiction — a bankruptcy case cannot be filed in a state court (Bankr. D. Md. official page — Legal Overview). Every debtor files statements listing assets, income, liabilities and creditors, and that information is required to be complete, accurate and truthful (11 U.S.C. § 527).

Filing generally triggers the automatic stay. As long as the stay remains in effect, creditors cannot bring or continue lawsuits, make wage garnishments, or even make telephone calls demanding payment (Bankr. D. Md. official page — Legal Overview).

Your interests in property become property of the estate when the case starts (11 U.S.C. § 541), and an ownership stake in a business is a property interest like any other. For individuals, a credit counselling briefing from an approved agency is generally required before filing (11 U.S.C. § 109).

Where do they differ most?

Two differences do most of the work. The first is the discharge. An individual case aims at relief from personal liability for dischargeable debts; the District of Arizona's pamphlet states plainly that corporations, partnerships and LLCs do not get discharges, which is why closing a company and filing personally are often separate decisions. Entities also have to be represented by an attorney — they cannot be represented in court by a non-lawyer officer (U.S. Bankr. Ct. D. Ariz., Choosing Your Chapter; Bankr. D. Minn. official guidance — Chapter 11 Small Business Non-Individual Debtor Filings (Including Subchapter V)).

The second is the consumer-debt test. Court instructions explain that if your debts are primarily consumer debts, the court can dismiss a Chapter 7 case where income is high enough to repay creditors a certain amount. Consumer debts are those incurred primarily for a personal, family or household purpose (Bankr. E.D. La. official guidance — Chapter 7 Form Packet), so a debt profile dominated by business obligations sits differently.

How the filer type changes the case
Filing situation	Chapters commonly discussed	Discharge	Forms series
Sole proprietor — business debt is your own debt	Chapter 7 or Chapter 13	Available to individuals for dischargeable debts	Individual (101 / 106 / 107)
Owner who personally guaranteed business debt	Chapter 7 or Chapter 13	Available to individuals for dischargeable debts	Individual (101 / 106 / 107)
Corporation, LLC or partnership filing its own case	Chapter 7 or Chapter 11	Courts note entities do not receive discharges	Non-individual (201 / 206 / 207)

Where should you start?

Start with the question of who the debtor is. If the business is a corporation, LLC or partnership and the company itself is the problem, that is an entity case, it uses the non-individual forms, and the courts require an attorney to represent it. If the pressure is on you — a guarantee, a sole proprietorship, a personal credit card used for the business, a company that has already shut down — you are looking at an individual case, and the four guides under this pillar take those situations one at a time.

The Roadmap is the quickest way to work out which of them fits, because it asks about structure, liability and enforcement in order rather than leaving you to guess. If you already know your situation and want the local detail, the court finder resolves which district and division your county sits in. Court instructions also encourage having an attorney review the choice of chapter.

Does your state change the answer here?

Not much, at this level. Bankruptcy is federal law, filed in a federal bankruptcy court, and the framework described on this page — who may be a debtor, which forms apply, what a discharge does — is the same in every state (Bankr. D. Md. official page — Legal Overview).

Where your state matters is one step down. Exemptions decide what property you can protect, and the amounts and categories are set state by state. The median income figure your household is compared against in a Chapter 7 case is also published per state and family size (U.S. Bankr. Ct. D. Ariz., Instructions for Completing the Bankruptcy Petition, Schedules and Statements).

Those figures live on the state pages rather than here, so that they only ever appear in one place and can be corrected in one place. Local practice also varies by district, which is why the court finder exists.

Frequently asked questions

Can my LLC or corporation file Chapter 13?: No. The District of Arizona's court pamphlet states that corporations, partnerships and LLCs are not eligible for Chapter 13 and do not get discharges. Chapter 13 is described in court materials as a voluntary repayment plan for individuals with regular income. An owner may still have their own individual options, which is a separate question from what the company can do.
If my company files, does that deal with debts I guaranteed?: Not by itself. A company's case addresses the company's liability. Where you signed a personal guarantee, the lender commonly has a right to payment from you as well, and the Code treats a claim as a right to payment whether or not it has been reduced to judgment (11 U.S.C. § 101). The personal guarantees guide under this pillar covers that in detail.
Does the means test apply if most of my debt is business debt?: The dismissal path court instructions describe applies where your debts are primarily consumer debts — debts incurred primarily for a personal, family or household purpose. A debt profile dominated by business obligations therefore sits differently from a household one. The classification is fact-specific and worth checking with an attorney rather than assuming.
What does it cost to file?: A Chapter 7 petition carries a $245 filing fee (28 U.S.C. § 1930(a)(1)(A), (f)(1)), a $78 administrative fee (Bankruptcy Court Miscellaneous Fee Schedule, Item 8), and a $15 trustee surcharge (Bankruptcy Court Miscellaneous Fee Schedule, Item 9). A Chapter 13 petition carries a $235 filing fee (28 U.S.C. § 1930(a)(1)(B)). Entity cases under other chapters have their own fees; check your court's schedule.
Do I have to have a lawyer?: A corporation, partnership or LLC does: courts require entities to be represented by an attorney, not by a non-lawyer officer. An individual may file without one, and some courts publish pro se guides for that purpose. Court materials still say you should have an attorney review your decision to file and your choice of chapter.
Will filing stop a garnishment on my wages?: Filing generally triggers the automatic stay. While the stay is in effect, court guidance describes creditors as unable to bring or continue lawsuits, make wage garnishments, or make telephone calls demanding payment. There are exceptions and a creditor can ask the court for relief from the stay, so the effect in a particular case is not automatic in every respect.

Sources

11 U.S.C. § 101 — Definitions · official source
11 U.S.C. § 109 — Who may be a debtor · official source
11 U.S.C. § 1304 — Debtor engaged in business · official source
11 U.S.C. § 527 — Disclosures · official source
11 U.S.C. § 541 — Property of the estate · official source
Bankr. D. Md. official page — Legal Overview
U.S. Bankr. Ct. D. Ariz., Choosing Your Chapter: What can Bankruptcy do for you? What will it do to you?
U.S. Bankr. Ct. D. Ariz., Instructions for Completing the Bankruptcy Petition, Schedules and Statements
Bankr. S.D. Iowa official guidance — Instructions - Bankruptcy Forms for Non-Individuals
Bankr. D. Minn. official guidance — Chapter 11 Small Business Non-Individual Debtor Filings (Including Subchapter V)
Bankr. E.D. La. official guidance — Chapter 7 Form Packet
Bankr. E.D. La. official guidance — Chapter 13 Form Packet
Bankruptcy Court Miscellaneous Fee Schedule, Item 8
Bankruptcy Court Miscellaneous Fee Schedule, Item 9
28 U.S.C. § 1930(a)(1)(A), (f)(1)
28 U.S.C. § 1930(a)(1)(B)

By Antonio G. Jimenez, Esq. · Florida Bar No. 21022

Sources verified July 27, 2026 · How we verify

Every figure on this page is drawn from a primary legal source and checked against our canonical legal database before publication. Bankruptcy.law is not a law firm and does not provide legal advice.

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