Chapter 7 Means Test in Houston

Houston Bankruptcy Lawyer

In accordance with the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, a significant change was made in regard to debtors qualifying to file for bankruptcy under Chapter 7 of the U.S. Bankruptcy Code. To file under Chapter 7, a debtor must now pass a means test. The means test is used to assess a debtor's income and expenses to determine whether he or she has the "means" to pay off part or all of his or her debt under a Chapter 13 repayment plan. A Houston bankruptcy lawyer at our law firm can help you understand what to expect in taking the means test and can assist you in properly presenting your income and expenses in this matter.

The means test is made up of two primary parts. The first step is a comparison of the debtor's income against the median income level for Texas. This number changes on a fairly regular basis, so it is important to talk to an attorney to find out what it is at this point in time. If a debtor makes less than the current median income, he or she will pass the test and will not have to go on to the next step. If the debtor makes more than the current median income, he or she may still have a chance of passing the means test. The second part of the means test is an evaluation of the debtor's income versus expenses to determine his or her "disposable income". Depending on this amount, the debtor may pass the means test at this stage.

Qualifying for Chapter 7 Bankruptcy

Find out more about taking the means test and qualifying for Chapter 7 bankruptcy by calling our offices or contacting us online to schedule a free, confidential consultation. We are here to assist you.

Contact a Houston Bankruptcy Attorney at the Malaise Law Firm today.