Means Testing

In 2005 Congress imposed means testing upon all bankruptcies that were comprised primarily of consumer debt. Means testing is a formula to determine if a debtor is eligible for a Chapter 7 bankruptcy discharge. This is, of course, extremely important because a Chapter 7 bankruptcy discharge can be obtained without payment to creditors and within approximately 3 months after filing. Whereas a Chapter 13 discharge normally comes after 5 years of making payments to creditors.

All those who make less than a certain amount do not have to take the means test. All of those who make more than that amount must take the means test. The amounts are as follows for Dallas and most surrounding counties:

1 person household: $38940

2 person household: $55859

3 person household: $59222

4 person household: $66381

5 person household: $73281

and $6900 per person thereafter

If the total gross (not takehome) income for the above households is less than the above amounts, then the debtor(s) do not have to take the means test. If their income is above those amounts, then they do have to take the means test.

Passing the means test is not a simple matter and, unless it is a clear pass or fail, it cannot be accurately determined by entering numbers into a computer. The issues of the means test are beyond the scope of this page.

Charles Chesnutt