In the case of Sheldon Baruch Toibb v. Stuart J. Radloff, 1990, the U.S Supreme Court ruled that an individual who is not a business owner can still file for bankruptcy under Chapter 11 of the Bankruptcy Code. The petitioner, Sheldon Baruch Toibb, was an individual debtor seeking relief under Chapter 11 but his petition was dismissed by lower courts on grounds that this provision only applied to businesses or individuals engaged in commercial activities. However, upon appeal to the Supreme Court it was determined there were no explicit restrictions within the language of Chapter 11 limiting its application solely to business entities or those involved in commercial ventures. Therefore, any person could seek protection and reorganization under this chapter regardless if they are conducting business activities or not.

In the dissenting opinion for Sheldon Baruch Toibb v. Stuart J. Radloff, Justice Marshall, joined by Justice Blackmun and Chief Justice Rehnquist, argued that the Bankruptcy Code does not permit an individual debtor to liquidate his or her debts under Chapter 7 unless he or she is engaged in business at the time of filing a bankruptcy petition. The majority's interpretation was seen as contrary to both the language and structure of the code itself. They believed that Congress intended to limit Chapter 7 relief only to those individuals who are currently involved in commercial activities because they face complex financial situations which require special provisions provided by this chapter. Furthermore, they pointed out that allowing non-business debtors access to Chapter 7 could potentially lead them into more severe financial difficulties due its complexity compared with other chapters designed specifically for consumer debtors.