Chapter 13 bankruptcy is a reorganization whereas Chapter 7 bankruptcy is a liquidation. A chapter 13 bankruptcy allows them to make up their overdue payments over time and to reinstate the original agreement. Where a debtor has valuable nonexempt property and wants to keep it, a chapter 13 . Step. When It Happens. You complete your official bankruptcy paperwork and take a pre-filing credit counseling course.; Before you file your Chapter 13 bankruptcy case. 2. You file for Chapter 13 bankruptcy. 3. The automatic stay takes effect. It bars most Author: Cara O'neill, Attorney. May 10, · Chapter 7 is a comparatively brief process, and usually only lasts four to six months before the court issues the discharge. On the other hand, Chapter 13 bankruptcy will last from three to five years, the length of a monthly payment plan you propose to the court to pay certain debts.