You wrote, "Should I file for bankruptcy during dissolution if I expect to be left with little to no assets?"
A: You have spun out too many hypotheticals/assumptions for analysis on this forum.
Consult a local bankruptcy attorney.
You wrote, "Chapter 7 question. I have a house which I rent. I use to live there. As a result I can't declare the house as a business."
A: I suggest you are mistaken and that you are operating a business.
Bankruptcy ch 7 provides a fresh start by the discharge of many--perhaps all--of a sole proprietor's debts. However, the price of that discharge may be the loss of non-exempt property rights (inventory, for example) or the extinction of critical lines of credit, that might make continuation of the business unfeasible.
A discharge order affects the ability of the discharged Creditor to enforce the debt by most collection procedures, such as filing suit, creating a lien, garnishing or levying on property.
However, when a Creditor has property of the bankruptcy debtor but also a debt that is owed to the Creditor, the Creditor might apply the doctrine of setoff or recoupment to finesse the discharge.
An explanation of these doctrines exceeds the mission statement of Avvo and the advice-limitations of attorneys...
You wrote, "Husband injured in auto accident 2009.
Filed for bk in 2010. Got discharged. Won PI in 2012 for $4oo k.
Took 10 month to finally get money from trustee after paying off the $50,000 in debt back to creditors. Found out we also have to pay trustee's fee of $38,000.
Can they do that?"
A: When a Chapter 7 bankruptcy Trustee finds assets to seize on behalf of Creditors of a bankruptcy debtor, the process of administration can take years if the asset is a chose in action or...
I think Wikipedia has got it correct,
"The United States District Courts have subject-matter jurisdiction over bankruptcy matters. However, each such district court may, by order, "refer" bankruptcy matters to the Bankruptcy Court, and most district courts have a standing "reference" order to that effect, so that all bankruptcy cases are handled by the Bankruptcy Court. In unusual circumstances, a district court may "withdraw the reference" (i.e., taking a particular case or proceeding...