SUMMARY: You must qualify to file Chapter 7 Bankruptcy by passing a means test. If you are military, vet, or have mostly non-consumer debt, you may not have to qualify. High expenses may help you pass the means test.
In order to be eligible for a Chapter 7 bankruptcy, you must pass a means test. The easiest way to pass is to show your income is below the median (or average) in the State of Texas for your household size according to the means test guidelines.
If your income is above median, you may still qualify to file a chapter 7 bankruptcy, depending on your expenses and circumstances. Your documentation requirements will be more extensive, however. The time period that is usually used to determine whether you are above or below median is the six month period before you file, not counting the month of filing.
You may still qualify for Chapter 7 if you have sufficient allowable expenses, such as:
- large house payment
- large on-going medical expenses
- motor vehicle loans
- tax debt
- child support or alimony
- charitable contributions
- extenuating circumstances
Even if your past income is high, you may be eligible for Chapter 7 bankruptcy. If you are not, you may be able to file a Chapter 13 bankruptcy.
You may also still qualify:
- if your income has gone down
- majority of your debt is non-consumer debt, such as tax debt, business debt, debt owed on rental property, etc.
- substantial portion of income is social security
- disabled veteran meeting specific guidelines
- active duty military, homeland defense or national guard
Your Next Step to Debt Relief
Consulting a knowledgeable, experienced bankruptcy attorney is critical. Pre-bankruptcy planning is often needed to properly document your deductions. Bankruptcy is a big decision and has a major life impact. You want to obtain all of the available relief, and truly obtain a fresh start.
Read More About Bankruptcy and Debt Relief
Chapter 7 – Usually the cheapest and fastest type of bankruptcy, Chapter 7 can wipe out credit cards, medical bills, and loans.
Chapter 13 – Does everything that Chapter 7 does, but with the added benefit of being able to help catch up on past due mortgages, car payments, and taxes.
Taxes – If you owe money to the IRS, there may be several different options for you, including some non-bankruptcy options.
Student Loans – There are many solutions to student loan issues, including getting a better payment plan, curing a default, and even loan forgiveness.
Debt Lawsuit Defense – When a creditor sues you over a debt, you can respond with a defense, which may allow you to win the lawsuit.
Loan Modifications – A special agreement between you and your mortgage lender might help you with a past due mortgage loan.
Debt Library – More in-depth articles on some of the more detailed areas of bankruptcy and debt relief.