How the Texas Bankruptcy Means Test Operates
To prevent abuse of federal Chapter 7 debt liquidation, Congress enacted the Means Test under the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA). The test determines whether your household has sufficient disposable income to fund a partial repayment plan under Chapter 13.
The Means Test does not simply look at what you earn today. Instead, it evaluates your household's average monthly gross income over the six full calendar months preceding your filing date. If your annualized income falls below the Texas median for your household size, you automatically qualify without further inquiry.
The 2-Step Means Test Qualification Framework
Compare Against Texas Median
Calculate your average gross household income over the preceding 6 full calendar months and multiply by 12.
Calculate Disposable Income
Subtract allowable IRS living expenses, mandatory payroll items, and actual secured debt disbursements.
Texas Median Income Benchmarks by Household Size
These figures represent the official U.S. Trustee Program median income benchmarks for bankruptcy cases filed in Texas. If your annualized earnings fall below the threshold for your family count, you pass Step 1.
| Household Size | Annualized Gross Median | Monthly Average Threshold |
|---|---|---|
| 1 Person | $62,560 | $5,213 |
| 2 People | $80,950 | $6,745 |
| 3 People | $91,840 | $7,653 |
| 4 People | $109,240 | $9,103 |
| 5 People | $119,140 | $9,928 |
| 6 People | $129,040 | $10,753 |
| 7 People | $138,940 | $11,578 |
| 8 People | $148,840 | $12,403 |
* Note: For households exceeding 8 individuals, add $9,900 for each additional family member. Thresholds updated periodically by the DOJ U.S. Trustee Program.
Required Documents Checklist for Means Test Audit
To accurately formulate your official Means Test calculation (Form 122A-1 & Form 122A-2), our legal team reviews the following verified financial records:
Statutory Exemptions from the Means Test
Non-Consumer & Business Debts
If more than 50% of your total liabilities originated from commercial endeavors, personal guarantees on LLC debts, or business operations rather than consumer personal spending, you are legally exempt from the Means Test entirely.
Disabled Veterans & Military Reservists
Disabled veterans whose debts were incurred primarily during active military duty or while performing homeland defense activities are exempted under 11 U.S.C. § 707(b)(2)(D).
Frequently Asked Questions About the Texas Means Test
What is the Texas Bankruptcy Means Test?+
The Means Test is a statutory formula established under 11 U.S.C. § 707(b) designed to determine whether a debtor has sufficient disposable income to repay a portion of unsecured debts through Chapter 13 rather than wiping them out completely in Chapter 7.
What if my household income is above the Texas median?+
If your gross household income exceeds the Texas median for your family size, you do not automatically fail. In Step 2 of the calculation, you deduct allowable IRS standard living expenses, mandatory payroll deductions, medical expenses, and actual contract secured mortgage and auto payments to determine your true disposable income.
How is average monthly income calculated under the Means Test?+
Your 'Current Monthly Income' (CMI) is calculated by taking the exact average of all gross income received from all sources during the six full calendar months prior to filing your bankruptcy petition, multiplied by 12 to establish your annualized household income.
What allowable expenses can be deducted in Step 2?+
Allowable deductions include IRS National Standards for food, clothing, and housekeeping; IRS Local Standards for housing and transportation; actual tax withholdings; mandatory retirement deductions; health insurance premiums; child support; and secured debt payments.
Are disabled veterans or business owners exempt from the Means Test?+
Yes. Filers whose debts are primarily non-consumer business debts are completely exempt from the Means Test. In addition, qualifying disabled veterans whose debts were incurred primarily during active military service or homeland defense are also exempt.