Any legal partnership, corporation, individual, or LLC is permitted to file under Chapter 11, although many smaller and medium-sized businesses have chosen to file in state courts (where possible) in recent years. It is usually too expensive for a small, unincorporated business to file for Chapter 11 protection. It is much less costly for the small businessperson to file a Chapter 13 personal petition to reorganize his/her debt payments. State court filings tend to be less expensive and often result in a much faster hearing and disposition than federal bankruptcy court proceedings. A business in cash flow or debt trouble can benefit greatly from the speed of receiving protection from creditor actions.

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