Even though you may feel as if you are drowning in debt, you must still find out if you qualify to file Chapter 7 bankruptcy in Texas. This is done through the means test, and according to NerdWallet.com, if most of your financial difficulties are from consumer debts that you cannot pay, you will probably pass.
The goal of the means test is to establish whether you actually have money to pay your debts. So, the first step is to document your income for the past six months. You get to include changes to your income that affect your ability to pay your bills, such as the loss of a job. Getting a new job must also be included. Once you have the answer to the income question, it is applied to the Texas median income to see if you fall below that amount. If you do, then you qualify to file Chapter 7 bankruptcy.
Insurmountable debt is not limited to those who make below the median income, so there is a second component to the test that may affect the results. This involves determining your expenses and revealing whether you have any disposable income to apply to your debts after your basic needs are covered. "Disposable income" is what you have left after subtracting your allowable expenses. These typically include the following:
- Housing expenses and utilities
- Medical costs
If you fail the means test, there are other means of relief, such as a restructuring of your debt through Chapter 13 bankruptcy, which allows you to pay what you can over a set period of time and have the rest discharged. Although this information can give you an idea of what the means test is, it is only a general overview, and should not be interpreted as legal advice.