Authentic Lessons for 21st Century Learning

It's Not What You Think: Chapter 7 or 13?

Standard 13: Bankruptcy

Susan McHale, Kristen Sublett, Niky Styers, Melissa Gunter | Published: September 26th, 2022 by K20 Center

  • Grade Level Grade Level 7th, 8th, 9th, 10th, 11th, 12th
  • Subject Subject Financial Literacy, Social Studies
  • Course Course Personal Financial Literacy
  • Time Frame Time Frame 150 minutes
  • Duration More 2-3 class periods


Students will understand the various forms of bankruptcy, how bankruptcy can occur, and alternatives to bankruptcy. This lesson includes optional modifications for distance learning. Resources for use in Google Classroom are included.

Essential Question(s)

What is bankruptcy? What are some alternatives to bankruptcy?



Students respond to a scenario that involves overwhelming debt and then brainstorm solutions.


Students watch several videos about various types of debt relief and create notes as they watch.


Using their notes, student pairs complete a Venn diagram to compare and contrast two of the four types of debt relief.


Students examine ways to prevent bankruptcy through revisiting the Engage scenario and understanding debt-to-income ratio.


Student groups use the Chant It, Sing It, Rap It strategy to summarize one of the topics in this lesson.


  • Lesson Slides (attached)

  • Cornell Two-Column Notes Questions (attached)

  • Venn Diagram handout (attached)

  • Scenario 2 handout (attached)

  • Teacher access to online videos


Begin by displaying slide 3 of the attached Lesson Slides. This slide displays a scenario about a student (Lance) who is in debt trouble. Ask students to get out a piece of paper and write down at least two possible solutions for Lance. Using the Think, Pair, Share learning strategy, pair students, and ask them to compare their ideas. After students have compared their answers (given about five minutes), call on pairs to share their possible solutions to Lance's problem.

On the class chalkboard or whiteboard, make two columns. Label the first column "Possible Solutions" and the second column "Disadvantages and Drawbacks." As pairs share out, write down all their viable solutions. Have students add the other possible solutions to their own notebook paper.

Move to slide 4. This slide shows an example of both a possible solution and a possible drawback for Lance borrowing money from his parents. After most of the solutions have been addressed, ask pairs to discuss whether they notice any possible drawbacks or disadvantages to the posted solutions. Allow 5-10 minutes for pairs to discuss all possible drawbacks to the solutions presented.

Have pairs share with the class the possible drawbacks or disadvantages for each solution they discussed. Write these in the second column on the board. Allow students to vote for the top two solutions that they feel are most viable from the completed list, given all the information presented.


Tell students that Lance has some choices in his scenario, although they may be limited, to solve his financial problems. Let students know that some people can have such severe debt problems, however, that their ability to repay their debt becomes virtually impossible. Tell students that today they will explore ways to get debt relief when debt becomes too overwhelming and impossible to repay. Display slide 5 and talk about how, typically, these are the few choices people have when they cannot repay their debt. Tell students that they will see three short videos that explain these choices in more detail.

Ask students to use the Cornell Notes System as they watch a series of short videos. To do this, they should prepare notebook paper prior to viewing the videos. The previous link provides detailed information about how to prepare notebook paper for this activity. You can also print and distribute the attached Cornell Two-Column Notes Questions graphic organizer to help students take notes. Ask students to take notes about the four types of debt relief and solutions as they watch each video.

Display slide 6. Students should copy the questions in the left column of their two-column notes, leaving spaces between them as displayed. Show the first video from ABC, "Real Strategies to Climb Out of Debt" (2:36 in length). You can also find the full link in the Resources section below.

After the video, allow students to complete questions 1-4 and summarize this video in their Cornell notes. If it suits your classroom needs, you can also choose to check students' understanding by asking questions and soliciting responses through a brief class discussion.

Display slide 7. Show the second video, "Bankruptcy Basics Part 1: Introduction" (2:50 in length), from the United States Federal Courts. You can also find the full link in the Resources section below.

After the video, allow time for students to work on their notes and begin their summary. Note that students will not have all the information needed to answer questions 5-8 until they see the next video.

Show the third video, "Bankruptcy Basics Part 2: Types of Bankruptcy," from the U.S. Federal Courts. You can also find the full link in the Resources section below. Show only the first 3:48 minutes of this video, which explains Chapter 7 and Chapter 13 bankruptcy. Stop the video when it begins to talk about Chapter 11 bankruptcy.

After the video, allow time for students to finish all their notes and summaries of the videos. If it suits your classroom needs, you can also choose to check students' understanding by asking questions and soliciting responses through a brief class discussion over questions 5-8 or any other questions not previously addressed.


Display slide 8, which shows directions for constructing a Venn diagram. Pair students with new partners or have students return to their original partners from the Think, Pair, Share activity. Pass out a copy of the attached Venn Diagram handout to each pair. Display slide 9, which shows one example of how students should fill out the Venn diagram. Ask pairs to, using their notes, choose, and then compare, any two types of debt relief discussed in the videos. Allow 25-30 minutes for students to compare and contrast two types of debt relief. Have students turn in their diagrams to assess their understanding of the various types of debt relief.


Show slide 10. Tell student pairs that lenders recommend that people have no more than 36% of debt based upon their debt-to-income ratio, or DTI. Go over the example on the slide, then show slide 11, which contains another scenario about Lance. Read the scenario aloud, and pass out a copy of the attached Scenario 2: Paying off Lance's Credit Cards handout to all students. Note that a teacher copy with answers to the handout is also attached.

Allow time for students to work on the handout and turn in their answers. A summary of the answer to Scenario 2 can be found on slide 12. Display this slide after students have turned in their handouts.


Combine student pairs to make groups of four. Have students use their Cornell notes to create a chant, song, or rap about debt relief using the Chant It, Sing, It, Rap It strategy. Show slide 13, which explains this activity. You may choose to assign specific topics to groups. This may include credit counseling agencies (non-profit), debt settlement companies (for-profit), Chapter 7 bankruptcy, Chapter 13 bankruptcy, and debt-to-income ratio.

Other assessments in this lesson include the Cornell Two-Column Notes and the Venn diagram.