A Business Bankruptcy Attorney Can Help You Differentiate Between Facts and Rumors
Bankruptcy is one of the most misunderstood areas of personal and business finance. Many people in Colorado avoid exploring bankruptcy because of rumors, fear, or outdated information.
In reality, bankruptcy is a legal tool designed to help individuals and business owners regain control of their financial future. Whether you’re considering chapter 7 bankruptcy, chapter 13 bankruptcy, or business bankruptcy, understanding the truth behind common myths can help you make informed decisions.
Top Bankruptcy Myths
Below are the top bankruptcy myths people often hear, and the facts that debunk them.
Myth 1: If You’re Married, Both of You Have To File
Many people believe that if one spouse files for bankruptcy, the other must file as well. This is not true. In Colorado, one spouse can file for bankruptcy individually. This can be helpful when only one spouse has significant debt or when keeping one spouse’s credit intact is important.
Myth 2: Bankruptcy Permanently Ruins Your Credit Beyond Repair
Some people think filing for chapter 7 bankruptcy or chapter 13 bankruptcy destroys your credit forever. While bankruptcy does impact your credit score, the effect is not permanent. Many people begin rebuilding credit within months by making on‑time payments, using secured credit cards, or following a structured financial plan.
Myth 3: Whatever You Spend Right Before Bankruptcy Won’t Have To Be Paid Back
There’s a misconception that you can max out credit cards or take out loans right before filing and have those debts erased. Courts take this very seriously. Large purchases, cash advances, or luxury spending right before filing can be flagged as fraud.
Myth 4: Bankruptcy Erases All Debt
Bankruptcy is a powerful tool for handling debt, but it does not eliminate every type of debt. Certain obligations, such as child support, alimony, most student loans, and some tax debts, cannot be discharged in chapter 7 bankruptcy or chapter 13 bankruptcy.
Myth 5: Bankruptcy Filers Aren’t Financially Responsible
This myth is one of the most harmful. People file for bankruptcy for many reasons: medical bills, job loss, divorce, business failure, or unexpected emergencies. Filing is often a responsible step toward rebuilding financial stability. Bankruptcy is not a sign of irresponsibility. It is a legal tool designed to help people recover from financial hardship.
Myth 6: Filing Bankruptcy Means You’ll Lose Everything
Many people fear that filing for chapter 7 bankruptcy means losing their home, car, or personal belongings. Colorado law provides exemptions that protect essential property. Most filers keep most — if not all — of their assets, including their home, car, and personal items.
Myth 7: You Won’t Lose Anything If You File Bankruptcy
On the opposite end, some believe bankruptcy protects every asset automatically. While many assets are protected, certain luxury items or high‑value property may not be exempt. Bankruptcy protects essential assets. What you keep depends on your situation and exemptions.
Myth 8: Filing for Bankruptcy Is Incredibly Difficult
The process may seem intimidating, but with the help of a business bankruptcy attorney or consumer bankruptcy lawyer, filing is straightforward. Attorneys guide you through paperwork, deadlines, and court requirements.
Myth 9: You Can Only File for Bankruptcy Once
You can file more than once, but there are waiting periods between filings. The timeline depends on whether you previously filed chapter 7 bankruptcy or chapter 13 bankruptcy.
Myth 10: Filing for Bankruptcy Puts Your Job at Risk
Federal law protects individuals from being fired solely because they filed for bankruptcy. Employers cannot terminate or punish you for using your legal right to seek financial relief.
How a Business Bankruptcy Attorney Helps You Navigate the Process
Whether you’re an individual or a business owner, bankruptcy can feel overwhelming without the right guidance. A business bankruptcy attorney plays a crucial role in helping you understand your options, protect your assets, and move forward with confidence.
Here’s what you can expect when working with a bankruptcy professional:
Clear Explanation of Your Options
A knowledgeable attorney will explain the differences between chapter 7 bankruptcy, chapter 13 bankruptcy, and business bankruptcy, helping you choose the path that best fits your financial situation.
Protection From Creditors
Once you hire an attorney, creditors must communicate through them. This reduces stress and prevents harassment.
Accurate Filing and Documentation
Bankruptcy requires detailed paperwork and strict deadlines. An attorney ensures everything is filed correctly, reducing the risk of delays or mistakes.
Representation in Court
If your case requires hearings or trustee meetings, your attorney will represent you and guide you through each step.
A Strategy for Moving Forward
A business bankruptcy attorney can help you rebuild credit, restructure your business, or create a long‑term financial plan after your case is complete.
Contact a Bankruptcy Attorney To Reclaim Control of Your Financial Future
Bankruptcy is surrounded by myths, but the truth is that it can be a powerful tool for individuals and business owners in Colorado who need a fresh start. Understanding the facts — and working with a skilled attorney — can help you make informed decisions and regain control of your financial future. Contact a bankruptcy attorney near you today to get started.