What Is the Means Test?

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Dallas Chapter 7 Bankruptcy Attorneys: What is the Bankruptcy Means Test?

A means test is a type of financial comparison that determines whether you meet the income qualifications for Chapter 7 bankruptcy. The Courts perform means tests to ensure that only persons who cannot fulfill their financial obligations qualify for Chapter 7 Bankruptcy. Although federal law governs means testing, if you are a Texas resident, then you will need to fulfill Texas income requirements to file bankruptcy.

Texas Means Test Qualifications

In a means test, the Court compares your adjusted gross income to the median income for your state and county. If your income is less than the median income for a family of your size in your region, then you have passed the means test and may qualify to file Chapter 7 Bankruptcy.

To calculate your income for the purposes of the means test, the Court will look at your current monthly income. The Court calculates your monthly income by averaging how much money you have made each month during the six months prior to filing for bankruptcy. In some instances, non-wage income sources, such as Social Security, do not count toward your current monthly income for the purposes of the means test.

When calculating your income on the means test, the Court will also consider your necessary monthly expenses. Necessary expenses generally include:

  • Your rent or mortgage and household utilities
  • Transportation costs, based on the cost of vehicle leases or loans or public transportation in your specific Texas county
  • Childcare costs, including education costs for disabled children
  • Life insurance premiums
  • Taxes and payroll deductions
  • Health insurance costs and health savings account contributions
  • Food and clothing

Since means test calculations can be complex, consider consulting a qualified DFW bankruptcy lawyer at Fears Nachawati Law Firm. He or she can help you create a fair representation of your income to present to the bankruptcy Court.

Chapter 13 Bankruptcy Options

Income is only one factor that the Courts consider in a bankruptcy, so if you pass the means test, this does not necessarily mean that you will qualify to file Chapter 7 bankruptcy in Texas.

Following the means test, you will still need to present information about your debts and prepare a lengthy bankruptcy petition. If you do not pass the Texas Chapter 7 means test but have enough disposable income to pay down some of your unsecured debts each month after covering your basic living expenses, then you may be qualified for Chapter 13 Bankruptcy, which includes a Court-approved debt repayment program.

Our DFW bankruptcy lawyers can guide you through the Means Test to determine if you qualify for a Chapter 7 bankruptcy. Even if you can’t pass the means test, but do not have enough money to pay off your bills in a Chapter 13 bankruptcy payment plan, we may be able to suggest some alternatives to bankruptcy to eliminate or reduce your debt.

Please contact the Fears Nachawati Law Firm at to arrange for a free case evaluation. And when you call, please ask your Dallas Chapter 7 bankruptcy attorney about our affordable payment plans.