Is Chapter 7 or 13 Cheaper? Find Out

For most people, Chapter 7 is cheaper upfront and overall because it takes only a few months and you pay nothing to creditors. Chapter 13 costs more in total, largely because you commit to a monthly payment plan for three to five years that must repay some debts. The difference is that Chapter 7 works best when you have little income and few assets to protect, while Chapter 13 is the practical choice when you need to save a home from foreclosure or a car from repossession and can afford a structured payment. Attorney fees also typically run higher for Chapter 13 due to the case lasting years instead of months, though many lawyers build those fees into the plan payment rather than requiring all of it upfront.

Simply put, Chapter 7 is almost always the lower-cost path if you qualify, while Chapter 13 becomes the smarter financial move when keeping secured property matters more than the higher total cost.

Chapter 7 requires you to pay most costs upfront before your case can move forward, and the largest fixed expense is the court filing fee. Unlike Chapter 13, you cannot roll these costs into a long-term payment plan.

• Court filing fee: $338, paid to the bankruptcy court when you submit your petition. This is the non-negotiable base cost for every Chapter 7 case.
• Credit counseling fee: You must complete a pre-filing course, typically costing $10 to $50 depending on the provider. You cannot file without the completion certificate.
• Attorney fees: Most Chapter 7 lawyers require full payment before filing. If a lawyer takes your case for $1,500, you typically need the full amount paid before they will submit your petition to the court.
• No built-in delay: Because Chapter 7 cases resolve in a few months, there is no ongoing plan to spread costs over time. The court does offer an installment option for the filing fee itself, but only in limited circumstances.

If paying everything at once is not possible, you can apply for a fee waiver or set up a court installment plan, which is covered later in this article.

In Chapter 13, your main cost shifts from a one-time filing fee to a court-ordered monthly payment plan that lasts three to five years. Instead of paying everything upfront, you make a single consolidated payment to a Chapter 13 trustee each month, who then distributes the money to your creditors according to your repayment plan.

The amount you pay monthly is based on your disposable income - what's left after covering allowed living expenses - and must at least equal what unsecured creditors would have received in a Chapter 7 liquidation. The plan must also catch up on any secured debt arrears, like a mortgage or car payment, meaning your required monthly payment can be significantly higher if you're saving a home from foreclosure.

Attorney fees can flip the script on which bankruptcy chapter looks cheaper, at least in the short term. Chapter 7 attorneys usually require full payment upfront before filing, while Chapter 13 lawyers often roll a large part of their fee into the repayment plan. This means walking into a Chapter 7 can feel more expensive on day one, even if it wipes out your debt faster and cheaper overall.

In a typical Chapter 13, you might pay a portion of the attorney's fee before filing and have the rest spread across your 3- to 5-year plan. That lower upfront cost can make Chapter 13 feel like the only affordable option when you need immediate protection from creditors. Just remember that spreading out the cost doesn't make it disappear, you're still paying the full legal fee, just over time through the trustee.

Chapter 13 can cost less in the long run when it protects an asset or type of debt that Chapter 7 would liquidate or leave unpaid, making the extra upfront cost a bargain compared to what you would lose otherwise. It's not about the sticker price, it's about the financial hole Chapter 13 fills that Chapter 7 digs deeper. Here are the most common scenarios where the math flips:

1. Saving a house from foreclosure. If you are behind on a mortgage, Chapter 13 stops the sale and lets you spread the missed payments over three to five years. Losing the home to a Chapter 7 liquidation auction often means walking away with nothing, while the repayment plan preserves your equity and keeps the roof over your head.
2. Protecting non-exempt assets. Chapter 7 allows a trustee to sell property you cannot fully exempt. In Chapter 13, you keep everything in exchange for paying unsecured creditors an amount equal to the value of those assets. Paying a premium to keep a business, a second car, or an inheritance often makes Chapter 13 the clear cheaper choice.
3. Managing priority tax debt. Recent income tax debts are rarely dischargeable in a Chapter 7 and continue to rack up penalties and interest. Chapter 13 forces them into a payment plan without ongoing collection actions, often reducing the total payout once extra fees stop compounding.
4. Stripping a second mortgage. If your home is worth less than the first mortgage balance, Chapter 13 can reclassify a wholly unsecured second mortgage as unsecured debt and discharge it at the end of the plan. This permanently erases a lien, a massive savings that no Chapter 7 can touch.

Chapter 7 is the lower-cost move when you have little to no disposable income, no assets you want to keep that are at risk, and mostly unsecured debts like credit cards and medical bills. In that situation, you pay the filing fees and attorney costs upfront and eliminate your debt without making years of monthly plan payments.

The math is simple. With no assets to protect beyond what your state exempts, you skip the trustee fees and the repayment plan that would eat into your paycheck over three to five years. The longer a Chapter 13 plan runs, the more you pay. A Chapter 7 that wipes away the same underlying debt finishes in months and avoids that future drain entirely.

A Chapter 7 also tends to be the cheaper route when you are judgment-proof: you have no house, no car above the exemption value, and no property the trustee can sell. Paying for a Chapter 13 plan to protect nothing of value adds unnecessary expenses. You are buying time you do not need.

There is one catch worth repeating from earlier: you must qualify for Chapter 7 under the means test. If your income is too high, Chapter 13 might be your only option even when Chapter 7 would otherwise cost less. Before deciding, confirm what you own, what your state protects, and whether you can pass the means test.

When you need to keep a house or car, Chapter 13 almost always becomes the more practical choice, even if it costs more overall. Chapter 7 can wipe out your personal liability for a loan, but it does not stop a lender from repossessing the collateral if you fall behind on payments.

In a Chapter 7, the math is blunt. You have to be current on the loan and have enough room in your state's exemption laws to protect your equity. If you are behind on mortgage or car payments, the lender can get court permission to foreclose or repossess shortly after the automatic stay expires. Chapter 7 works for keeping secured property only when the loan is up to date and the equity is minimal.

Chapter 13 changes the equation because the payment plan can actually fix the problem.

• Mortgage arrears: You can spread past-due mortgage payments over the three- to five-year plan, effectively stopping a foreclosure and bringing the loan current over time.
• Car loan cramdowns: If your car loan is at least 910 days old, you may be able to reduce the principal balance to the car's current market value and often lower the interest rate.
• Stripping junior liens: In many districts, a wholly unsecured second mortgage can be stripped off and treated like credit card debt, paid at pennies on the dollar.

These tools mean you often trade a higher upfront cost and a multi-year plan payment for the ability to keep an asset you would lose in Chapter 7. The real cost comparison is not just filing fees or attorney fees. It is whether losing the house or car costs you more than the difference in bankruptcy complexity.

If you can't afford the filing fees upfront, you can ask the court to either waive them completely or let you pay in installments. This can make the upfront cost of bankruptcy far less of a barrier.

For Chapter 7, you submit a formal application showing your household income is below 150% of the federal poverty line and that you can't pay in installments. If approved, the court erases the filing fee entirely. If you don't qualify for a full waiver, you can typically split the fee into up to four payments over 120 days, though the total must be paid before your case can move forward.

Chapter 13 filers don't get fee waivers, but you can often fold the filing fee into your monthly plan payment instead of paying it all at the start. Since Chapter 13 already spreads costs over several years, this approach lines up naturally with how the repayment plan works. Either way, the goal is the same: get the protection you need without letting a lump-sum fee stop you.

The total you pay depends far more on your income, assets, and debt type than on a one-size-fits-all number. A simple Chapter 7 can cost under $2,000 total, while a Chapter 13 repayment plan often runs $3,500 to $6,000 in fees alone, before you pay back any debt.

Here's how two common budgets play out. First, a low-income renter with $30,000 in credit card debt: In Chapter 7, they might pay a $1,200 flat attorney fee plus the $338 filing fee, and be done in months. In Chapter 13, that same person would pay the attorney roughly $3,500 through the plan, trustee fees of 4% to 10% on all payments, and still repay some debt. The Chapter 7 route is clearly cheaper.

Now consider a homeowner behind on a mortgage. Filing Chapter 7 won't stop a foreclosure permanently. Chapter 13 lets them cure the arrears over five years, but the cost structure shifts. A typical attorney fee of $4,500 gets added to the plan, plus trustee fees on every dollar paid. If they repay $20,000 in mortgage arrears and $15,000 in other secured debts, trustee fees alone could add several thousand dollars. The bankruptcy costs more overall because the plan handles valuable assets Chapter 7 couldn't protect.

Your budget dictates the chapter, and the chapter dictates the final bill. The cheapest option on paper fails if it doesn't solve your core problem, like stopping a home foreclosure or wiping out a lawsuit.