Personal and Business Bankruptcy: Chapter 7, Chapter 11, Chapter 13
This depends on the type of bankruptcy filing. If you file for a Chapter 7 bankruptcy, your assets will be liquidated and it is highly unlikely you will have anything left to run your business. If you file a Chapter 11 or Chapter 13, you will be the Debtor in Possession and run your business while your creditors will be repaid under terms set forth by the bankruptcy court.
Conversion is when a court order changes the bankruptcy proceeding from a Chapter 11 case to a Chapter 7. This means the debtor must immediately stop all of its business operations. A Chapter 7 trustee is appointed who has the responsibility to assemble and liquidate all of the debtor's assets, and the proceeds pay the claims of creditors.
Creditors are paid in an order determined by bankruptcy law. Secured creditors are paid first and in the order determined by the court. The assets of your business are liquidated and the bankruptcy trustee will distribute them.
A corporate bankruptcy does not directly affect an individual shareholder, unless that shareholder is personally liable for the debts of the business. Depending on the type of corporation, you may have protection for your assets.