What is Means Testing?

At the same as the petition a report to the Court of your current monthly income is required (defined as the average of your income from all sources in the last 6 months) In the event that your income for your household size (household means everyone in your household whether you can claim them on your tax return or not) is less than the median income for Texas, then the analysis stops there and you are eligible for a chapter 7 discharge.

Median income

Effective March 15, 2011, Median income for a household of

1. is $38294

2. is $55178

3. is $56445

4. is $65477

5. or more you add $7500 per person to 4.

If your income exceeds the median income then we will provide a more detailed "Means Testing" document (budget). If there is less than roughly $100 left over after that analysis then you are eligible for a chapter 7 discharge. The "Means Testing" is the new government defined test and as such is not necessarily logical or simple. It is an attempt to weed out people that can pay back their debts but does not operate in the way it was intended.

If your income(as defined by congress) less the means testing comes up with more than roughly $100 per month, you may still show special circumstances that would entitle you to chapter 7 relief. Excessive energy or gasoline costs would be an example along with special needs children or health issues. Also unemployment, cessation of second job or cessation of overtime pay would be an example of special circumstance.

Proof of your income for the past 2 months is required to be filed with the petition. That can consist of bank statements, payroll stub from 2 months ago and the most recent stub so that the difference can be calculated. If you are a small business we need to have an accurate accounting of what your income and expenses are.