I am considering filing Chapter 7 for my small business for which is financed between two banks.

"Small business" does not tell me anything about how your business is legally held.  Is this a corporation?  Is it a partnership?  An LLC?  An LLP?  Or is it merely a sole proprietorship/dba of yourself?  The answer to your question depends on the answer to the above. If you are a sole proprietorship, then you are liable for the debts.  If not, then you probably are not, but it depends on whether you personally guaranteed the debts or there is any basis to pierce the corporate veil (if it is a corporation) under applicable state law. Finally, if your business is a corporation, filing a bankruptcy may or may not be beneficial.  You should review my article on filing bankruptcy for corporations.  Mark Markus has been practicing exclusively bankruptcy law in California since 1991.  He is a Certified Specialist in Bankruptcy Law by the State Bar of California Board of Legal Specialization,  AV-Rated by martindale.com, and A+ rated by the Better Business Bureau.