The Restructure: Business Bankruptcy, Workouts & Wind-Downs Guide (2026)

Fresh Start Series · Business Edition
Assess. Restructure. Recover.

Most business bankruptcy information is written for lawyers or written to sell you something. This is written for the owner who needs to understand the decision before making it.

The three facts that change everything:

• An LLC or corporation gets no discharge in Chapter 7. Owners file expecting debt relief and get an empty shell that still legally owes everything.
• Withheld payroll taxes follow you home. The Trust Fund Recovery Penalty is assessed against you personally, through any entity, and survives every chapter of bankruptcy.
• The entity filing is usually the smaller half of the problem. Between personal guarantees and trust fund liability, your own exposure typically dwarfs what a business case resolves.

Sixteen chapters covering:

• Restructure, work out, or wind down — the test that tells you which situation you're actually in
• How your entity type determines who files, who stays liable, and whether bankruptcy helps at all
• Personal guarantees: what bankruptcy does and does not release
• The full out-of-court menu — workouts, forbearance, ABCs, receiverships, Article 9 sales, dissolution
• Chapter 11 and Subchapter V in depth, including the 60-day and 90-day deadlines that decide cases
• Chapter 7 business liquidation and when dissolving under state law is the better choice
• Leases and contracts under Section 365, including the 210-day deadline that ends location-based businesses
• Employees, payroll priority, WARN Act obligations, and the trust fund penalty
• Preferences, fraudulent transfers, and the look-back windows — what not to do in the year before filing
• Fiduciary duty in the zone of insolvency
• Complete official forms checklist for entity and sole proprietor filings
• Costs, credit aftermath, and rebuilding business credit

Current as of August 2026, including the pending Subchapter V debt limit legislation that determines who is eligible to file.

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Important: This guide is educational content only. It is not legal, tax, or financial advice, and purchase does not create an attorney-client relationship. Business insolvency law varies by state and federal district, and several figures are subject to periodic adjustment or pending legislation. Consult a licensed attorney in your state before making any filing decision.