What Is the Main Difference Between Chapter 7 and Chapter 13? Here's the simplest way to think about it: Chapter 7 wipes out most of your debts quickly (usually in 3-4 months), while Chapter 13 sets up a 3 to 5 year repayment plan which lets you keep more assets. Chapter 7 is often called "liquidation bankruptcy" because a trustee can sell non-exempt property to pay creditors. Chapter 13 is a "reorganization bankruptcy" where you keep your stuff but commit to a court-approved
