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. This test 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, Texas 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 empowerment session.


Contact Allmand Law Firm, PLLC at (214) 238-9608 to get started.


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