In this episode, Philip sits down with Larry Friedman, former Director of the U.S. Trustee Program, to rapid-fire what happens in a bankruptcy. They cover who finds out, what to tell your family, how public records really work, what a trustee looks for, and why honesty makes the whole process smoother.
Frequently Asked Questions
- Will my employer find out that I filed bankruptcy?
- Will my family find out that I filed?
- Isn’t bankruptcy public? Can people look me up online?
- What should I tell a landlord or lender who asks about my bankruptcy?
- What actually happens at the 341 meeting with the trustee?
- How common is it to lose property in Chapter 7?
- How long until I get my discharge?
- What does a discharge actually do?
- Should I try debt settlement or “debt validation” instead of bankruptcy?
- Big picture, what’s the most important thing to do before I file?
- What happens if I’m not truthful?
FAQ: Will my employer find out that I filed bankruptcy?
Usually no. The main exception is when your wages are being garnished. Filing stops the garnishment, and your payroll department will see the court order that releases it. That’s not a bad thing—it means you keep your paycheck and the problem is getting fixed. Firing someone for filing can create legal issues for an employer.
FAQ: Will my family find out that I filed?
Only if you owe a family member money, because you must list every creditor. Have a direct conversation and explain that the debt will be included. Don’t secretly repay relatives before filing; that can be treated as a “preference,” and the trustee may ask for the money back to treat all creditors fairly. If you don’t owe family anything, they have no reason to know.
FAQ: Isn’t bankruptcy public? Can people look me up online?
Bankruptcy is public record, but it isn’t easily searchable on Google or social media. Someone would need a PACER account, know how to search, and pay per lookup. In daily life, almost no one checks PACER. However, landlords and lenders will see your filing on a credit report, so be ready to explain it briefly and confidently.
FAQ: What should I tell a landlord or lender who asks about my bankruptcy?
Be upfront. A simple script works: “I filed to wipe out unmanageable debt so I could pay my current bills on time. I’ve completed the required course and I’m on a clean budget.” Clear, honest answers build trust and prevent surprises later.
FAQ: What actually happens at the 341 meeting with the trustee?
The 341 meeting is a short, formal Q&A about your papers and finances. The trustee verifies your identity, reviews your documents, and asks basic questions to confirm accuracy. When you’re honest and prepared, the meeting is routine and over in just a few minutes.
FAQ: How common is it to lose property in Chapter 7?
Most Chapter 7 cases are “no-asset” cases, meaning there’s nothing for the trustee to sell. Roughly 92–93% fall into that category. If your case is no-asset and your forms are accurate, the trustee files a “no distribution” report and your discharge proceeds on schedule.
FAQ: How long until I get my discharge?
For most cases, discharge is entered about 90 days after your first 341 meeting, provided you complete the post-filing debtor-education course. Your attorney will give you your specific timeline and course link.
FAQ: What does a discharge actually do?
A discharge is a federal court order that permanently stops collection on discharged debts. Creditors can’t sue, call, or report those balances as due. If a creditor violates the order, the court can sanction them. Keep copies of your discharge and contact your attorney if any creditor continues collection efforts.
FAQ: Should I try debt settlement or “debt validation” instead of bankruptcy?
Debt settlement and validation programs often drag on, charge high fees, and don’t stop lawsuits or collections. Bankruptcy, on the other hand, is a defined legal process with a clear endpoint—court-ordered relief and a clean financial slate.
FAQ: Big picture, what’s the most important thing to do before I file?
Tell your attorney everything. If you’re worried about a transfer, cash app payment, loan to a relative, or a recent purchase, bring it up now. The fastest route to a smooth discharge is transparency and complete preparation.
FAQ: What happens if I’m not truthful?
Hiding assets, transfers, or income can turn a simple case into a serious one. The trustee can deny your discharge, recover funds paid to preferred creditors, and in severe cases refer matters for enforcement. Be candid—your lawyer can solve nearly any issue if they know about it early.
