AMA for March 2025

This posts discusses issues bound up in bankruptcy. It does not create an attorney-client relationship, and you should definitely not rely on it for (or as) legal advice. For advice as to your specific situation, seek out a qualified bankruptcy attorney. We can think of one.

Question 1

Hi. I filed for chapter 7. I just had my 341 meeting and thought everything was going great. I was really only waiting out the 60 days. Today I was served with a lawsuit from the local civil court stating that a collector has filed a lawsuit against me. I did everything Pro Se through Upsolve. 

I’ll start by saying that this would be a really good time to reach out to a bankruptcy attorney for legal advice. I can’t advise you on this, nor can Upsolve. I am assuming that this lawsuit follows from a pre petition debt. What I can say is that, according to 11 U.S.C. § 362(a), debtor’s are protected against collection efforts (including lawsuits) while their case is open and the automatic stay is in effect. Ordinarily, a creditor lawsuit filed against a debtor can result in real trouble for the creditor, since the debtor could seek damages, costs, and attorney’s fee. 11 U.S.C. § 362(k). But there’s a catch: you cannot sue them (at least not in good faith, let alone successfully) if you did not provide notice to the creditor. 11 U.S.C. § 342. In any bankruptcy filing, the debtors must list all creditors, with no exceptions. 11 U.S.C. § 521(a)(1). I list my clients’ creditors even if the amount-owing is $0. At any rate, now would be a good time to call an attorney before things get worse.

Question 2

I was considering filing for bankruptcy on my own, without a lawyer, but I ran into a hurdle with the bankruptcy computer system in my state. It’s not openly accessible—you need to register and link a credit card just to get in. An attorney told me the system won’t let me see my case. Plus, every move you make, like clicking to view documents or explore options, racks up more charges on your card. That left me with no clear idea of what it might cost just to poke around and learn how bankruptcy cases work. On a brighter note, I recently represented myself in a civil court case and scored a hefty settlement. Now, I can use that money to wrap up my bankruptcy, which has already been a pricey ordeal—ha! Funny thing is, my bankruptcy attorney told me the system doesn’t even let me peek at my own case. Honestly, it feels like bankruptcy is set up to be this confusing, mysterious mess on purpose. Bankruptcy seems like a purposely mysterious racket.

Although it’s not clear, it sounds like you might fire your attorney and go it alone. At any rate, I completely understand your frustration with the bankruptcy process, especially the computer system and its costs. Let me clarify a few things to ease your concerns. The system you’re referring to is PACER (Public Access to Court Electronic Records), a federal platform used by all bankruptcy courts—not a secretive state system. It’s governed by the Judicial Conference of the United States, and while it requires registration and a payment method, the fees are modest—$0.10 per page, capped at $3 per document.

You mentioned your attorney saying the system won’t let you see your own case—that’s not accurate. As a party to your bankruptcy, under 28 U.S.C. § 1930, you’re entitled to access your case files without charge through the clerk’s office. Bankruptcy law, found in Title 11 of the U.S. Code (the Bankruptcy Code), outlines options like Chapter 7 or 13, each with specific rules. The Federal Rules of Bankruptcy Procedure (e.g., Rule 1007) also require steps like filing schedules and attending creditor meetings.

Your civil court win is impressive, but bankruptcy is a different beast. Common pro se mistakes include skipping mandatory credit counseling (11 U.S.C. § 109(h)), misunderstanding the automatic stay (11 U.S.C. § 362), or filing incomplete documents, risking dismissal. Bankruptcy isn’t a “mysterious racket”—it’s a structured process to help debtors, though its complexity can feel overwhelming. Lastly, you will definitely want to discuss the proceeds of your lawsuit win with an attorney, because this isn’t something you want to let go without it being addressed.

Question 3

I need help. I am married and living in Spokane, WA. Household income is $90,000. I’ve racked up insane debt: approximately $80,000 in credit card debt. Three personal loans (one jointly with my hubby) $30,000 and $50,000. We both “own” cars, but we are paying $600 a month. Our mortgage is $2000 a month, and our home is worth $400,000. I am struggling, and I don’t know what to do. I’m current on payments but it’s only a matter of time before things get real bad. I want to file bankruptcy and have a fresh new start while keeping our house and cars. I got myself into this mess from bad habits, gambling problems and unlucky work situations.

What should I do? I know I’ve screwed things up. Can I file bankruptcy without my husband filing? Is there an advantage or disadvantage to this? Thanks in advance.

A fresh start isn’t fresh if old habits remain. Before doing anything else, and as filing is not an immediate priority, it’s probably a good idea to remake bad habits (check out Atomic Habits by James Clear) and get that gambling problem solved. As for bad luck, I’ve got nothing for that.

Assuming only you file: the first thing I’ll say is that Washington state is a community property state, which means that all assets and debts acquired during the marriage (with few exceptions) are part of the marital community RCW 26.16.030. In other words, if you owe/own it, so does he. If you file without him, you’ll remove your liability for the debt, but not his. But there’s a twist here, since you jointly own your assets—and let’s assume they are all exempt—you’ll get what is (informally) known as a communal discharge 11 U.S.C. § 524(a)(3). In other words, your joint assets cannot be seized to satisfy a debt. But, let’s remember that he can still be sued and his wages can still be garnished.

Before continuing, please note that you can use either state or federal exemptions to protect your assets, but not both.

Spokane County’s homestead exemption (assuming you’ve owned the home for at least 1215 days) is (as of March 2025) $430,700 RCW 6.13.030. This means that $430,700 worth of equity is exempt from legal process if you properly claim the exemption. Note that this amount is based on the greater of $125,000 or the county median sale price for a single-family home in the preceding calendar year, and it may be subject to change, so verify the current amount. If you’ve owned the home less than 1215 days, then your exemption is limited to $125,000. Note, this homestead must be your primary residence. Oh, and you also need to have lived in Washington state for at least two years (730 days) to qualify for state exemptions 11 U.S.C. § 522(b)(3)(A). The automobile exemption is $15,000 per vehicle RCW 6.15.010(1)(c)(iii). Note that this is the current state exemption amount per debtor for a single motor vehicle. Note: exempt amounts in RCW are valid until July 2025.

While you can certainly file without your husband, there are some risks. Remember, bankruptcy only removes the debtor’s obligation to pay 11 U.S.C. § 524.