What is the income limit for Chapter 7 in Texas?

If your total monthly income over the course of the next 60 months is less than $7,475 then you pass the means test and you may file a Chapter 7 bankruptcy. If it is over $12,475 then you fail the means test and don’t have the option of filing Chapter 7.

How do you pass a means test with high income?

You can earn a high income and still pass the means test if you have substantial expenses like a hefty mortgage, multiple car payments, taxes, childcare, health care, or care of an elderly or disabled person.

How is Chapter 7 means test calculated?

The means test is calculated by comparing the debtor’s average income for the past six months (current monthly income), annualized, to the median income for households of the same size in the debtor’s state of residence.

How do you beat the mean test?

Using Your Expenses to Pass the Means Test As a result, if your income is high, your expenses must also be high to pass the means test. The means test requires debtors to use national and local standards for most living expenses, rather than the actual amount of the debtor’s expenses.

What happens if you fail the means test?

If you fail the means test, you won’t be able to use Chapter 7 bankruptcy to wipe out debts. Instead, you might qualify to repay a portion of what you owe in Chapter 13 bankruptcy through a three- to five-year Chapter 13 repayment plan.

What happens if you don’t pass the means test?

If you fail the means test If you can’t wait any longer to file for bankruptcy and can’t pass the means test, you’ll be restricted to a Chapter 13 and will pay back your debts over three to five years.

What income is included in means test?

gross wages
(2) Review your sources of income. All gross wages (whether you’re on salary or paid by the hour) are included on the means test. Gross wages are what your paycheck says you’ve earned before all the taxes and other deductions are taken out.

What is the purpose of the means test?

The purpose of the means test is to see that if the debtor is abusing the bankruptcy system by filing Chapter 7 bankruptcy cases even though they could afford to pay at least some of their debts. Therefore, the means test is mainly testing the ability of the debtor to pay the creditor(s).

What is a financial means test?

A means test determines if a person or household is eligible to receive some sort of benefit or payment. Means-tested benefits include many government assistance and state and federal welfare programs that measure a family’s income against the federal poverty line.

How would means testing for Social Security work?

In its simplest form, means-testing would look at the annual income of Social Security beneficiaries and determine, based on that income, whether they’d receive a reduced benefit check, or no benefit check at all.

What income is counted in the means test?

For the means test purposes, your current monthly income (CMI) is the average monthly income you receive from all sources during the full six-month period preceding your filing date.

What is means-tested social welfare?

Means test. To qualify for a social assistance payment you must satisfy a means test. A means test examines all your sources of income. However, some income is not taken into account in the calculation of your means.