About the Chapter 7 Means Test
Filing for Chapter 7 Bankruptcy in Dallas, TX
If you are interested in filing for Chapter 7 bankruptcy, you must first
determine if you qualify by taking the means test, which will determine
whether your income is low enough for you to file under Chapter 7—rather than
Chapter 13. It was designed to keep debtors with higher incomes from filing under
this chapter, namely because it allows filers to discharge most, if not
all, of their unsecured debts in a short period of time.
Let our bankruptcy attorney in Dallas help you determine your eligibility
for Chapter 7 bankruptcy by
scheduling your free evaluation today.
How the Means Test Determines Your Eligibility
The first step in the Chapter 7 means test is to compare your average monthly
income to the median income for a family of your size in Texas. If your
average income is less than or equal to the state median, you are eligible for
Chapter 7 bankruptcy. However, if it is higher than the median, you will need to complete the
next step in the means test.
Typically, the income calculation will include:
- Wages, tips, bonuses, and overtime
- Income from a business or farm
- Interest, dividends, and royalties
- Unemployment payments
- Pension and retirement income
- Workers’ compensation
- State disability insurance
- Child support or spousal support
- Income from rental properties
Step two of the means test will determine whether or not you have enough
“disposable income” left over each month to repay your unsecured
debts. If your disposable income is too high—after deducting certain
monthly expenses—you would fail the means test. In other words,
you would be prohibited from filing for Chapter 7 bankruptcy.
I Didn’t Pass the Means Test – What Now?
If you have failed the Chapter 7 means test, it is important to understand
that you still have the option to file for
Chapter 13 bankruptcy. With this type of bankruptcy, you would reorganize your debts and make
monthly payments over three to five years. Although it is a longer process,
Chapter 13 is still a viable debt-relief solution.
Call Our Dallas Bankruptcy Lawyers: (214) 238-9608
Are you interested in filing for Chapter 7 bankruptcy? If so, you should
learn more about your debt relief options by contacting the Dallas bankruptcy
attorneys at Allmand Law Firm, PLLC.
We have already helped thousands of people overcome their debt! Call our office today to schedule your free financial
Contact Allmand Law Firm, PLLC at (214) 238-9608 to get started.