Bankruptcy:  Comparing
Chapter 7 with Chapter 13

C h a p t e r  7

C h a p t e r  13


Creditor’s Perspective


Creditor’s Perspective

  • Complete forgiveness of most debt

  • Total loss – must write off an asset

  • Partial debt forgiveness likely

  • Gets at  least some of the money owed it

  • Debtor gets a “fresh start” – walks away with “clean slate”

  • Creditor is left with bad debt on its books

  • Must continue with debt burden until paid off

  • Regular stream of income for period of repayment

  • Process is usually complete within 120 days  

  • Creditor may have worked with debtor for several years before bankruptcy petition on a plan to pay down the debt– now creditor is not given very much time to contest & is often useless for creditor to  contest anyway

  • No quick fix – repayment period usually 3-5 years

  • Repayment more equitable than discharge of debt since creditor may have lent its money to debtor in form of granting credit, for years prior to petition

  • Quick, easy

  • Too quick and too easy – invites abuse

  • Can help preserve business relationships where debtor intends to continue operating, or does not want to “start from scratch” again after CH 7 discharge

  • Often see it to their benefit to work with debtors who show intent to “stick it out” and repay their debt instead of seeking discharge  under Chapter 7

  • Court’s involvement usually ends after 120 days with discharge

  • Forever foreclosed from asserting any rights to collect the debt after discharge granted (usually 120 days after filing)

  • Ongoing supervision and involvement of the bankruptcy court until payment plan completed

  • Supervision viewed as valuable in keeping debtor on course with payment plan


For more information about bankruptcy, please see the other pages in this section:

  1. Basics of Bankruptcy
  2. Getting Started
  3. Pre-Filing Timeline
  4. Post-Filing Timeline
  5. Paperwork
  6. Chap. 7 or 13? (you are on this page)
  7. More Information

How to Contact Bruce A. Wilson, APLC

I make an effort to accommodate urgent matters, and new clients are always welcome. For more information or to make an appointment, please contact me either by:

Telephone: (619) 497-0627


I can be reached by telephone Monday through Friday, 9:00 a.m. to 5:30 p.m. You may also use the form below to contact me. This form is answered Monday through Friday during the work day. Please remember that for me to become your attorney, we must first have a written attorney-client agreement signed by both of us, so please do not email any confidential information at this point. After I have reached an agreement with you, we can then exchange information freely. I look forward to helping you.

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