Today I asked Claude to find the ten nine most asked questions (and expressed concerns) pertaining to bankruptcy. I also asked Claude for a few sentences fleshing out each question. Since most of the responses come from non-attorneys, I thought it would be fun to answer these questions… because I am a bankruptcy attorney and I love writing. Note: some of my answers are going to be verbose, but don’t let that discourage you. One more note: I put Claude’s summary under the question in italics, underneath that is my answer.
Is it worth filing for my amount of debt?
This is the most common post. People ask it with a specific number attached, such as whether it’s worth filing over $20k, or with a fear attached, like the poster who hesitated because they’d heard it ruins your life but feared wage garnishment.
This is actually a sneaky good question with a good reason attached. At what point does the balance tip from “life being ruined if I file” to “I will be garnished if I don’t.” First, bankruptcy exists to get you a fresh start, and the law is decidedly in your favor. Employers cannot discriminate against you for filing, and you are unlikely to lose a security clearance. So the issue really is where is the cliff? Is it at $20k/$30k/$100k of debt? To be sure, there is no specific amount where the scales tip because life is fluid. It is what you do not see or do not plan for that gets you, and usually it is work disruption, medical problems, divorce and so on. I think the decision point comes when you’re sued, can’t pay bills without borrowing money or using credit, you’re getting garnished, or you are contemplating cashing out your retirement account(s).
The worst option, in my view, is cashing out your retirement only to get into the same trouble a year later, although taking out a second mortgage is pretty terrible as well because you’re converting unsecured debt to secured debt, which is flat-out terrible. Let me add that these are decision points where bankruptcy really should be an option a person considers.
So it is worth it to file at under $20k? I don’t think the numbers matter as much as the circumstances: lawsuits, garnishments, foreclosures… you get the idea.
Chapter 7 or 13, and what if I make too much for 7?
Means-test anxiety is constant. One typical post came from a single Cook County filer earning $79k who believed they couldn’t pass the Illinois means test.
I can’t speak to Illinois specifically, but I can speak about this topic generally. The means test isn’t really a “test” in the academic sense. You don’t “pass” the means test only when your income is under median because the analysis depends upon other factors when you’re over median. Rather, the means test determines the rules you play by. Those rules determine how much disposable income you have and whether you can afford to pay creditors.
Eastern Washington residents benefit from the state’s high median—thank you Seattle income earners.
Will they take my car or house?
Examples include someone considering bankruptcy but worried about losing their car, and a filer asking whether a 2021 appraisal still counts for home equity, and how much cash they can keep in the bank.
Probably not. Most people who file Chapter 7 bankruptcy keep both.
Let’s start with who "they" are. Only two parties can take your property in a Chapter 7: your lender and the bankruptcy trustee.
Your lender can only take the house or car if you stop paying. If you're current on the mortgage or car loan and you keep paying, filing bankruptcy doesn't give the lender a new reason to come after you.
The trustee can only sell property that has value you can't protect. Washington law lets you protect a large amount of equity in your home and up to $15,000 of value in a vehicle. If your equity fits inside those protections, there is nothing for the trustee to sell. He also has to pay off the mortgage, a real estate agent, and closing costs before creditors see a dime, so if the numbers don't work, he walks away from the property and you keep it.
So for most people, the answer is boring: keep making your payments, and you keep your stuff.
Where people actually get hurt
The real danger is usually something you did before filing, often while trying to protect yourself.
Putting someone on your house title. If you added a spouse or relative to your deed in the last four years and they didn't pay for it, the trustee may be able to undo that transfer. In some cases you lose the exemption you would have had if you'd left the deed alone. Unfortunate fact: a divorce doesn’t automatically fix this. If a judge decided who got the house after a contested divorce, the trustee is generally stuck with that result. But if you and your spouse just agreed that one of you gets the house, and nobody fought about it, the trustee gets to ask whether you received anything of real value in return. If the answer is no, that transfer can be undone like any other. But I don’t want to stress this too much because the on-point case (In re Bledsoe, 569 F.3d 1106 (9th Cir. 2009)) lays out the elements in a way that leaves the door open. For instance, you might get reasonably equivalent value if you give your spouse the house and they assume the mortgage (assumption deed helps). Then there are issues about when the transfer occurs: is it when the deed is recorded, or when the agreement is made, and not everyone agrees about this. So if you let your spouse keep house in a 2019 divorce and they don’t record the deed until 2025, and the house’s value doubled, then the date of the transfer could matter a lot if the mortgage debt doesn’t rise with the value. It could be a legitimate holy shit moment, but I have not seen the local trustees pounce on this one, and I think it is ultimately a fight and the trustee could lose.
Putting your car in someone else's name. This is a classic example. If you titled your car to your son or a friend, the trustee can demand it back and sue the person holding it. The car you could have protected is now unprotected, and your family member is in a lawsuit.
Your spouse's bankruptcy. Washington is a community property state. A house owned by the marriage can be pulled into one spouse's case even if the other never files.
A lender's paperwork mistake. If your mortgage was never properly recorded, your house can look like it has far more equity than you think.
Every one of these is something an attorney can find before you file by checking the county records and asking the right questions. Found early, most can be fixed or planned around. Found by the trustee after you file, they are much harder.
You are very likely to come out of this with your home and your car. The people who lose property are almost always the ones who filed without anyone checking first. In other words, don’t go pro se if you own a house or car.
For a much deeper dive into this check out my full post ("Will they take my car or house in a Chapter 7 Bankruptcy?").
When can I get a credit card again, and why hasn’t my score updated?
A recurring version: after discharge, Experian still shows payment history as “Poor” with closed accounts counted.
You can apply for a credit card. There is no waiting period. Most people can get a secured card right away, and unsecured offers usually follow within the first year. Your score hasn’t jumped because a discharge wipes out (your liability for) the debt, not the history. The bankruptcy and your old late payments stay on your report for years, so “Poor” payment history is normal. Check your reports 60 days after discharge. Discharged debts should show a zero balance. If a creditor is still reporting a balance or new late payments, dispute it with the credit bureau. A creditor that won’t fix it can be liable.
What happens at the 341 meeting?
These are fear posts before the meeting (“My 341 is in July and I’m Scared”) and “what next” posts after it (“341 Done... Now what?”).
There’s a video about what happens at the meeting of creditors.
Otherwise, let’s start with the fact that the Meeting of Creditors (i.e. the “341”) is, or at least should be, a no drama affair.
After the Meeting concludes, your attorney will usually receive an email from the trustee (a generic ECF-generated email) issuing a “Report of No Distribution.” This means the trustee did not find any assets to take and sell. Then there is the “Trustee Services Rendered” email, which means that the trustee is “off” the case. After that, your discharge is the next major milestone… unless the US Trustee decides your case is one worth dismissing based on 11 U.S. Code § 707 of the bankruptcy code.
Should I sign the reaffirmation agreement, and what if I don’t?
Typical examples are a debtor who refused One Main’s reaffirmation request and asked whether to worry, and a discharged Carvana borrower asking how long Bridgecrest would wait before repossessing after payments stop.
Invariably no. Here’s a deeper dive into why on my position about reaffirming a debt. OneMain doesn’t typically repossess cars. The cars are usually upside down, and a repo costs them money. But, OneMain does negotiate loan amounts and interest rates, so if you are going to reaffirm anyway, it could make sense if the amounts are low (in the four digits). Otherwise, Ford will likely repo a car without a signed reaffirmation. Numerica will demand a reaffirmation for recent loans. For the most part, credit unions are far more likely to demand a reaffirmation than other lenders. If you have other debts with the credit unions, then the situation becomes more complicated.
Can I file without a lawyer, and what does it cost?
One example: can someone with no real assets file easily without a lawyer?
Yes. The cost is the $338 filing fee plus the two required courses. The fee can be paid in installments or waived for low-income filers.
Whether it is “easy” is another matter. The paperwork, though laborious, is the easiest part of the case and the easiest to screw up. Leave out a required document and your case gets dismissed. List an asset wrong and you can lose it. Forget the second course and the case closes with no discharge at all, which means you paid the filing fee for nothing—this happens. And if you screw the paperwork up or try to hide transfers, expect the US Trustee to grill you about it at the Meeting of Creditors.
Debt is not “eliminated” or “wiped out.”
Upsolve is one way people file without an attorney, but Upsolve generally won’t generate your forms if you own a home or earn more than your state’s median income. One thing to understand before you use any do-it-yourself tool: sites like Upsolve say bankruptcy “eliminates debt” (as of 11 November 2026). That’s shorthand and it is not true. What a discharge actually eliminates is your personal liability for the debt (see the law below). The difference matters in three places. If someone co-signed for you, they still owe. If a creditor has a lien on your property, the lien stays unless avoided. And if your Washington State divorce decree says you’ll pay a debt and hold your ex harmless, that promise to your ex survives a Chapter 7, and they can sue you if they are successfully pursued for that debt. A form generator won’t catch any of that for you. I wouldn’t try to file pro se if I owned a car, either.
Finally, I worry about pro se filers when children are involved. A blown discharge or sanctions don’t just hurt the debtor, but the people who rely on the debtor. I suggest using the money you were paying to credit cards to hire an attorney.
The law
11 U.S.C. § 524(a) defines what a discharge does, and it speaks in terms of personal liability both times:
§ 524(a)(1) voids any judgment to the extent it determines “the personal liability of the debtor” on a discharged debt.
§ 524(a)(2) enjoins any act to collect a discharged debt “as a personal liability of the debtor.”
Moreover, § 524(e) says the discharge of a debt of the debtor “does not affect the liability of any other entity” for that debt. If the debt itself were wiped out, co-signers and guarantors would be off the hook too, and they aren’t.
Did I do something before filing that will cause trouble?
This covers selling a house, recent loans, repaying family, and fraud fears. Examples range from a WI couple selling a house for $45k profit who wondered about exempting it to clawback from a parent’s bankruptcy.
I covered transfers above: putting someone on a deed, or titling a car to your kid. Here are the other three I see constantly.
Paying back family. If you repaid your mom $3,000 before filing, the trustee can sue your mom to get it back. But this depends on the trustee, their caseload, and their willingness to negotiate a repayment amount. For relatives, he can look back a full year. I know paying Visa instead of your mother feels wrong, but the trustee doesn’t care about mom.
Running up the cards. Charge more than $900 in luxuries on one card in the 90 days before you file, or take more than $1,250 in cash advances in the 70 days before, and that debt is presumed to survive your bankruptcy. Groceries and gas are fine. A vacation is not. The presumption in the 90 days prior to filing is that you are insolvent, which means the creditors don’t even need to prove insolvency. Now whether they pursue the debtor is another matter.
Selling the house. The profit doesn’t stay protected just because the house was your home. Washington protects the proceeds only for a limited time and only if you handle the money correctly. Talk to an attorney before you close, not after you’ve spent it.
To put it mildly, bankruptcy is very forgiving if you tell the truth, don’t lie, and fix your mistakes with an amended filing. It is not forgiving if you hide things. A discharge can be revoked if it later comes out that you concealed transfers or assets.
I’m being sued or garnished. Will bankruptcy stop it?
One poster, sued by a creditor while unemployed with no valuable assets, asked for the basics.
Yes. The moment you file, the automatic stay stops the lawsuit and the garnishment. But word doesn’t travel on its own. You really need to make sure that opposing counsel is notified, and you should file a notice of the bankruptcy with the court you are being sued in.
Two exceptions. The stay does not stop child support or alimony. And if you had another bankruptcy case dismissed in the past year, your stay may last only 30 days, or may not kick in at all.
Can you get back what was already taken? Sometimes. If the creditor garnished $600 or more in the 90 days before you filed, that money can be recovered. There is one caveat: it still has to be exempted on Schedule C, or else the trustee can pursue it and keep it for your creditors. Anything taken before those 90 days is gone.
This is general information about Chapter 7 in Washington, not legal advice for your situation.
