This year, despite already owning two different vacuum cleaners, I took the plunge and purchased a robotic vacuum cleaner. While not as powerful as my manual vacuums, a girl on the go needs time for activities, and eliminating a chore in a constantly dusty household was an appealing prospect. But a girl on the go also needs funds to execute her plans, so I purchased an off-brand robotic vacuum cleaner instead of Roomba, a pioneer in the industry. In a capitalist society, I have learned over the years that paying for a brand name is hardly worth it, especially when an alternative generic item is available for half the price. Apparently, other shoppers have the same attitude. iRobot, the company behind Roomba vacuums, filed for chapter 11 bankruptcy on December 14, 2025.
The Roomba was first introduced to hygienic households back in 2002. iRobot went public in 2005 with a share price of $125. After filing its chapter 11 bankruptcy petition in 2025, its stock value sat at just $1.20. Amazon was slated to purchase iRobot in 2022, but interference from European Union regulators caused the deal to collapse. Amazon paid a termination fee of $94 million, which kept iRobot afloat for a few more years. But in September 2025, the vacuum maker began to warn the public that it was struggling with declining sales. With the cost of living on the rise, fewer people have disposable income available for what is ultimately a luxury product, as this product offers convenience but not necessities, like the ability to clean upholstery. They also have less disposable income available to spend on name-brand products when more affordable alternatives are available.
Roomba may survive bankruptcy, as iRobot filed with a deal already in place to sell to Chinese contract manufacturer Shenzhen PICEA Robotics Co. iRobot has assured customers that the sale should help it avoid interruptions to its app and customer service. But those who purchased Roombas now have no idea who has access to data from this app, which maps out rooms in a home to help the vacuum clean more efficiently. For now, iRobot and Roombas don’t appear to be going anywhere, despite struggles in the current economic environment. If you are struggling with personal debt, bankruptcy may be available to you as well, although it will likely play out far differently than iRobot’s bankruptcy case. Read on to learn more about bankruptcy in both a business and consumer context. If you want more information about filing for bankruptcy in Phoenix or Tucson with Arizona’s leading choice for Zero Down Bankruptcy Representation, call 602-649-4949 today.
What Happens In Chapter 11 Bankruptcy?
Chapter 11 bankruptcy- the type of bankruptcy that iRobot filed- is a debt relief option for both consumers and corporations, but it is most commonly used to relieve business debts. It is a popular choice for business owners because it allows them to structure debts without shutting down operations for good. When a company files for chapter 7 bankruptcy, it typically means the end of the business. But because chapter 11 bankruptcy restructures debts instead of liquidating them, debtors have a chance to work out an agreement with creditors. Unless the company qualifies for a small business exception, chapter 11 bankruptcy debtors’ top creditors will form a committee after the petition has been filed. This committee has vast authorities and responsibilities during the bankruptcy case, like voting on major operational changes and how the debtor should emerge from bankruptcy. However, in many Chapter 11 bankruptcy cases, the debtor has pre-negotiated a deal with creditors before filing a bankruptcy petition. This is what happened here with iRobot.
Not every chapter 11 debtor enters bankruptcy with a pre-packaged deal with their creditors. Some only are able to reach an agreement several months into chapter 11 bankruptcy. The debtor might find new investments, including a buyer for the entire company. Sometimes seriously revamping the business plan will be enough to leverage a company out of bankruptcy. No matter the plan used, the proposal will be submitted to the creditor committee to vote on its approval. The committee may also have an opportunity to submit its own proposal, with the trustee overseeing the deal to make sure it is fair to all involved parties.
What Happens In Chapter 7 Bankruptcy?
Chapter 7 bankruptcy is a form of bankruptcy available to both consumers and corporations, and it liquidates unsecured non-priority debt. In a business context, this means that the company must liquidate as well. But consumers are not so affected by a chapter 7 bankruptcy filing. They will be prevented from proceeding with many types of financial and legal proceedings, such as divorce or buying a home, while the bankruptcy is active. This is because assets are frozen upon filing by the automatic stay. But this inconvenience should only last about 3 to 6 months, at which point the debtor’s case should be eligible for discharge and financial burdens are absolved. After discharge, the debtor can apply for credit cards, purchase a financed vehicle, and otherwise get back to life as normal with few limitations.
Chapter 7 bankruptcy clearly carries valuable benefits, but it isn’t the right choice for everyone who is struggling with debt. A debtor must prove they have insufficient income debts to qualify for chapter 7 bankruptcy, which can either be done through a median household income comparison or the means test. A debtor must report every asset they own to the trustee, and if any of them are ineligible for protection under a state bankruptcy exemption, the trustee can sell them at auction to pay off debts from the bankruptcy estate. And chapter 7 bankruptcy won’t do a debtor much good if their debt are primarily secured and priority debts. Chapter 7 bankruptcy is most effective for those who are seeking to clear the following types of debts:
- Credit card debts (can’t exceed spending limits for several months prior to filing for bankruptcy)
- Unpaid medical bills
- Unpaid utility bills
- Personal loans (not title loans)
- Non-priority tax debt (must be at least a few years old and meet other requirements)
- Deficiency balance from a repossession
- Lawsuit judgments (with limitations)
Start Your Bankruptcy Journey With Arizona’s Choice for Affordable & Reliable Bankruptcy Lawyers
It seems like almost every day lately, a major corporation files for bankruptcy due to overwhelming financial obligations. This isn’t just a coincidence, but a sign of issues affecting both businesses and individuals in our economy. If you have incurred unsecured debt that is spiraling out of control, it may be time to put a stop to the madness. Filing for bankruptcy activates the automatic stay, which stops creditors from pursuing their favorite forms of collection efforts. A successful discharge clears burdensome debts so the debtor can move forward with a clean slate. Want to learn more about how to get the most out of bankruptcy while keeping bankruptcy-related stress to a minimum? Atlas Bankruptcy Lawyers offers free consultations by phone and affordable payment plan options starting at Zero Dollars Down for eligible clients. See if you’re qualified today with your free consultation at 602-649-4949 for more information.
