The Texas Bankruptcy Means Test Explained: Do You Qualify for Chapter 7?
To file Chapter 7 bankruptcy, you have to pass something called the means test. The name sounds intimidating, but for most people in Texas it is not an obstacle — it is a straightforward calculation, and the majority of people who need Chapter 7 qualify for it.
What Is the Means Test?
The means test was introduced by Congress in 2005 to prevent high-income filers from using Chapter 7 when they have the ability to repay debts. It is a two-part income analysis. If you pass the first part, the second part is not required.
Part One: Compare Your Income to the Texas Median
Compare your average monthly income over the past six months to the median income for a household of your size in Texas. If your income is at or below the median, you automatically pass and can proceed with Chapter 7. As of 2025, the approximate Texas median annual income figures are $58,000 for a single person, $76,000 for two people, $85,000 for three, and $97,000 for a family of four.
Part Two: The Detailed Expense Calculation
If your income exceeds the Texas median, you do not automatically disqualify — you move to part two. This subtracts allowable monthly expenses from your income. If remaining disposable income falls below the threshold set by the bankruptcy code, you still qualify for Chapter 7. Legitimate deductions include housing, transportation, healthcare, childcare, and secured debt payments. This is where having an experienced attorney matters — correct calculation can bring even higher-income filers into Chapter 7 eligibility.
What If You Do Not Pass?
Failing the means test does not mean bankruptcy is unavailable — it means Chapter 13 may be the right chapter. For higher-income filers, Chapter 13 often provides significant benefits including asset protection and the ability to catch up on secured debts.
Call my Houston office at (713) 366-1288 for a free consultation. I will run the means test with you during our first meeting so you know exactly where you stand.