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Inside A Bankruptcy Means Test

By Christopher Lee November 1, 2012 | Posted in

When looking into filing Chapter 7 bankruptcy, there is one big hurdle you must overcome: an income restriction. The bankruptcy laws now require for anyone filing Chapter 7 to meet strict income requirements in order to be eligible. Here is what you need to know:

First, the way you qualify is based on a “means test”. This test evaluates your income and expenses against the median income of your state. Most people are able to pass the means test because they meet a “current monthly income” threshold, which is calculated by using your average income from the six months prior to filing your case.

For example, if you file for Chapter 7 in November of this year the average amount of income from May 1, 2012 to October 30, 2012 would be determined. It is important to note that “income” includes things such as your salary, wages, bonuses, tips, spousal support, insurance settlements, unemployment benefits, cash gifts and gambling winnings.

Take your “current monthly income” and compare it to the median income of your state. For Texas, the amounts are as follows:

  • Single person -$40,925
  • Two person family -$55,653
  • Three person family -$59,650
  • Four person family – $68,875

If your “current monthly income” is less than this amount, you qualify for Chapter 7. If it is greater than this amount, you will be required to pass a further examination of your expenses. At this point you may be eligible for Chapter 7 if your debts are high enough, otherwise you will need to seek Chapter 13. Your Dallas bankruptcy attorney can help you determine which eligibility you meet.


Which of the following has happened to you RECENTLY?(select all that apply)

  • Creditor Harassment
  • Disability or Illness
  • Divorce
  • Foreclosure
  • Lawsuits of Judgments
  • License Suspension
  • Loss of Income
  • Loss of Job
  • Repossession
  • None of the above
  • Other

 Est. Total Debt


What to do now? : Simply add up ALL of your total debt from the items on the left( estimated is fine) and enter the total in this box. Then click NEXT.


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