I think that a Chapter 11 Bankruptcy would work well in this situation, however, the small business reorganization act I think works best being that as this is a sole proprietorship and the amount of debt is less than 2.7 million. Some of the benefits of this form of bankruptcy include, "Debtors have the right to continue operating their business. A trustee oversees the process (instead of a creditors' committee). Only debtors have the right to file a plan of reorganization. Debtors are not required to file a disclosure statement. Courts will confirm a plan (even if creditors are opposed) so long as the plan uses all disposable income to pay debts for a period of three to five years" (page 900-901). If there is an extreme confidence that this business can succeed again I think this is the best route: they can still operate, they file their plan, and the repayment of debt in three to five years is very reasonable.

For the top one why do you agree or disagree

For the bottom one also the same thing why do you agree or disagree

In this case, Chapter 11 bankruptcy would be the best option since the business owner believes the business can rebound from its downturn. The text book explains, "The objective of Chapters 11 and 13 is to rehabilitate the debtor" (884).

I understand the question stated that the debtors wish to keep all their personal assets, but let's get real. If I were in this situation, the first thing I would give up would a my expensive car. The value of the Tesla alone would cover the debt if it's in good condition. Also, Chapter 11 would take a portion of future revenues from the business which is okay as the owner believes the business will be profitable again.