You are unable to pay your debts as they generally become due and you spend more time managing the crisis than managing your business. It may be time to consider filing a Notice of Intent followed by a Proposal under the Bankruptcy and Insolvency Act (BIA) to obtain creditor protection.
This recourse applies to the same circumstances as the case above, but it is only available to larger companies that have more than $5 million in total debt. This recourse is more expensive but has certain advantages over the BIA route above.
In some cases, it may be better to carry out an orderly liquidation of company assets that could result in higher sales than a bankruptcy-enforced liquidation. However, this option is not always possible, leaving bankruptcy as the only option.