Entrepreneurs are an optimistic sort, so it may be hard to admit that your small business needs to file for bankruptcy. But even the best of us go bankrupt, just ask 50 Cent, Kodak, and the company that makes Twinkies.

There are a few options for small business bankruptcy, and here's what you can expect if you file for Chapter 11 or “reorganization” bankruptcy.

Chapter 11 Filing

Chapter 11 bankruptcy is an attempt to allow your business to reorganize and create a plan to repay debts to creditors. While Chapter 11 is rare for small businesses, it is an option for businesses with fewer than 500 employees and less than $2.19 million in debt.

First you'll have to file a petition for bankruptcy protection with the U.S. Bankruptcy Court, including:

• Copy of your business's most recent balance sheet
• Statement of operations
• Cash-flow statement
• Copy of the most recent federal income tax return

Soon after filing, you'll probably need to have what's known as a “341 meeting” with your business' creditors to discuss the business's finances and consider a reorganization plan.

Chapter 11 Reorganization Plan

You'll have 180 days to negotiate with your creditors and create a reorganization plan. This plan will outline exactly how the business will deal with its creditors, typically by dividing the creditors into classes and prioritizing a repayment plan. And your creditors will have a say — creditors will vote on the reorganization plan and each class of creditors must approve the plan as it relates to that class.

Chapter 11 bankruptcies are often more closely monitored by courts, and can cost tens of thousands of dollars. However, a Chapter 11 reorganization plan can discharge certain debts accrued before the filing and give your small business a chance to rebound from the bankruptcy.

Bankruptcy filings and the reorganization proceedings can be complex. If you'd like legal assistance with a bankruptcy filing, you can contact an experienced bankruptcy attorney in your area.