Spot The Difference: Bankruptcies, Charge Offs and Collections.

The items listed on your account can impact your credit score in many different ways. In todays blog, we will go over some of the most common items listed on a consumers credit report, how they differ from others of their kind and their natural fall off date. 


Bankruptcies are one of the rarer items found on some consumers credit report as it requires copious amounts of paperwork from the person declaring and court meetings. Many consumers are unsure of the differences found between a chapter 13 bankruptcy and a chapter 7. 

Chapter 7– A chapter 7 bankruptcy is the more common bankruptcy listed reports as it is a simple way of filing and is a discharge of your unsecured debt, but allows for the liquidation of your assets to pay creditors. That begin said, a chapter 7 bankruptcy has the longest lifespan out of the two with its fall off date set for 10 years after its filing date. 

Chapter 13– A chapter 13 bankruptcy differs from a chapter 7 by setting up a plan to pay off the debts still owed. A chapter 13 bankruptcy is for those that have a stable income that are able to make payments toward their debt and can stop liquidation of your assets and foreclosure on your home. 

Collection VS Charge Off 

When looking over your credit report with negative items listed, you may notice similar looking items with different reporting names. Collections and charge offs are some of the most common items found on derogatory reports, but many do not know the difference. 

Collection– Collections are listed as open accounts that have a balance listed that needs to be collected upon. A collection account usually stands with a collections agency as they have relieved the original creditor of the debt and will usually attempt to collect the debt at a discounted rate. 

Charge Off– A charge off is an account that is seen as a loss to the creditor and has been written off as such. Charge offs, however, can still be negotiated off of the report in some cases by attempting a “pay foe deletion”. A pay for deletion is a negotiation between you and the creditor where the consumer will pay the balance owed on the account in exchange for the item to be removed from their credit report. 

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