Understand the means test, income requirements, and qualification process for Chapter 7 bankruptcy in Texas
For a family of four in Texas, the income limit to qualify for certain financial relief measures is set at $117,717 annually, as of the period from November 1, 2024, to April 30, 2025. If your household's yearly income falls below this threshold, we can explore various bankruptcy options that may offer you a fresh financial start.
These limits are based on the median income for Texas and are updated regularly by the U.S. Trustee Program
Effective November 1, 2024 - April 30, 2025
| Household Size | Annual Income Limit | Monthly Income | Additional Information |
|---|---|---|---|
| 1 Person | $65,597 | $5,466 | Single filer, no dependents |
| 2 People | $84,771 | $7,064 | Married couple or single with 1 dependent |
| 3 People | $97,190 | $8,099 | Couple with 1 child or single with 2 dependents |
| 4 People | $117,717 | $9,810 | Standard family of four |
| 5 People | $127,617 | $10,635 | Add $9,900 for each additional person |
| 6 People | $137,517 | $11,460 | Larger household considerations apply |
Determining if you qualify for Chapter 7 bankruptcy hinges on your income level relative to your state's median. If your current monthly income is less than the median income for a household of your size in your state, you likely qualify. Our free means test calculator can help you assess your eligibility in under 5 minutes.
Use our free Chapter 7 means test calculator to check your eligibility in under 5 minutes
Calculate Your Eligibility →The Chapter 7 means test determines if you're eligible for debt discharge by comparing your income against state median levels. If we find your income is below Texas' median for a family of your size, you pass automatically. For those above, specific allowable deductions, such as taxes and expenses, are subtracted to assess eligibility further.
The means test determines whether your income is low enough to file for Chapter 7 bankruptcy
Calculate your average monthly income over the past 6 months. Include all sources: wages, business income, rental income, and regular contributions from others.
If your income is below the Texas median for your household size, you automatically qualify for Chapter 7. No further calculations needed.
If above median, subtract allowed expenses from your income. If your disposable income is low enough, you may still qualify for Chapter 7.
In the means test calculation for bankruptcy, income includes wages, business earnings, rental revenue, and pension among others, but excludes Social Security and VA benefits. Specifically, under the Bankruptcy Code, regular contributions towards household expenses from family members are considered income, directly influencing the means test outcome.
Understanding which sources are included in the means test calculation
• Employment wages and salary
• Business and self-employment income
• Rental and property income
• Interest and dividends
• Pension and retirement income
• Regular contributions from family
• Unemployment compensation
• Social Security benefits
• Disability payments (SSD/SSI)
• VA disability compensation
• Certain victim compensation payments
• Child support received for dependents
• Foster care payments
• Some tax refunds
Filing for Chapter 7 bankruptcy involves submitting a petition along with financial documents, which triggers an automatic stay prohibiting creditors from collection actions. Within 60 days of filing, you must attend a creditors' meeting to discuss your case under oath. Remember, completing a credit counseling session is mandatory within 180 days before your petition date.
From initial consultation to debt discharge
Meet with a bankruptcy attorney to review your financial situation and determine if Chapter 7 is right for you.
Complete mandatory credit counseling from an approved agency within 180 days before filing.
Submit your bankruptcy petition, schedules, and means test to the court. Automatic stay begins immediately.
Attend a brief meeting with the trustee (20-40 days after filing) to answer questions under oath.
Receive your discharge order (60-90 days after creditors meeting), eliminating eligible debts.
If your unsecured debts are over 25% medical, the means test may favor you, potentially easing bankruptcy qualification. Disabled veterans or those with debts from active duty aren't subject to the means test, aligning with the Veterans Benefits Act of 2010. When business debts exceed 50%, personal bankruptcy might not require passing the means test, streamlining the process.
Situations that may affect your income calculation or eligibility
If you have significant medical debt (over 25% of your unsecured debt), special considerations may apply to your means test calculation, potentially making qualification easier.
Disabled veterans and those whose debts were incurred primarily during active duty or homeland defense activity may be exempt from the means test entirely.
If your debts are primarily business-related rather than consumer debts, you may not need to pass the means test to qualify for Chapter 7 bankruptcy.
Lost your job or had income reduced? The 6-month lookback period means waiting a few months could help you qualify if your current income is now below the limit.
Part-time dependents, elderly parents, or adult children living at home may affect your household size calculation and increase your income limits.
Certain necessary expenses like childcare, chronic medical conditions, or care for elderly family members can be deducted in the means test calculation.
Get answers to common questions about Chapter 7 income limits
Don't give up! You may still qualify through the "second part" of the means test, which accounts for your actual expenses. Many people with above-median income still qualify for Chapter 7 after deducting allowed expenses like mortgage payments, car loans, taxes, insurance, and childcare.
Household size includes yourself, your spouse (even if not filing jointly), and any dependents you can claim on your tax return. It may also include other family members if you provide more than 50% of their support, such as elderly parents or adult children.
Yes, if you're married and living together, your spouse's income must be included in the means test calculation even if filing individually. However, you can deduct the portion of their income that doesn't contribute to household expenses.
The means test uses your average income from the past 6 months. If you recently lost your job or had a significant income reduction, waiting a few months to file might help you fall below the income limit. Consult with an attorney about timing your filing strategically.
Yes, all employment income including bonuses, overtime, commissions, and tips received in the past 6 months must be included. However, if these were one-time payments unlikely to continue, your attorney can argue for adjustments in the calculation.
If you don't qualify for Chapter 7, you may still file for Chapter 13 bankruptcy, which involves a 3-5 year repayment plan. Chapter 13 can still provide significant debt relief and stop foreclosures, garnishments, and creditor harassment.
To start your Chapter 7 bankruptcy process smoothly, our guide equips you with a detailed checklist of necessary documents, a clear timeline to anticipate, and insights into what the journey entails. By downloading our PDF guide, you'll learn that filing for Chapter 7 can discharge most debts within 3-6 months, providing a fresh financial start.
Complete checklist of documents needed, timeline, and what to expect
📥 Download PDF GuideGet a free consultation with an experienced bankruptcy attorney to discuss your options
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