Texas Chapter 7 Bankruptcy Income Limits and Means Test

To file Chapter 7 bankruptcy in Texas, your household income generally has to fall below the state median for your household size. For cases filed between November 1, 2025, and March 31, 2026, that line sits at $65,123 a year for a single earner and $114,938 for a four-person household. Earning more than the applicable figure does not disqualify you; it moves you into a longer calculation called the means test, which many above-median filers still pass.

Current Texas Median Income Figures

The U.S. Department of Justice publishes updated Texas median income figures several times a year, drawn from Census Bureau data. For cases filed between November 1, 2025, and March 31, 2026, the annual limits are:

1 earner: $65,123
2 people: $84,491
3 people: $96,728
4 people: $114,938

For households larger than four, add $11,100 per additional person.¹ If you file after March 31, 2026, check the DOJ means testing page for the current numbers.

If your annual income is at or below the applicable threshold, the law says no presumption of abuse exists and you skip the detailed expense analysis.² Most below-median filers move straight to preparing the petition.

How Your Income Is Actually Counted

The number compared against the Texas median is not last month’s paycheck. Federal law defines “current monthly income” as the average of all gross income you received during the six full calendar months before your filing date, multiplied by twelve.³ That six-month window can hurt. If you held a high-paying job for four of those months and then lost it, those earnings still count in full.

Almost everything is included: wages, self-employment income, rental income, interest, dividends, and regular contributions others make toward your household expenses. If a parent pays your electric bill every month or a partner chips in for groceries, that money is in.

What Doesn’t Count

Social Security is the biggest exclusion. Retirement and disability payments from Social Security do not enter the means test calculation, no matter the amount.³ For retirees living mostly on Social Security, this alone often drops countable income below the Texas median.

Certain veterans’ benefits are also excluded. The HAVEN Act keeps VA disability compensation, combat-related injury payments, and similar military disability pay out of the income calculation.⁴ Payments to victims of war crimes and terrorism are excluded as well.

If You’re Married and Filing Alone

Filing individually does not keep your spouse’s income out of the calculation. A non-filing spouse’s income is added to your household total for the means test. You can offset that with a marital adjustment deduction covering expenses your spouse pays independently, such as their own credit card bills or child support from a prior relationship. Account statements and similar documentation support those deductions.

Picking the Right Household Size

Which median figure you measure against depends on your household size, so getting the count right matters. A single person earning $70,000 fails the one-earner test ($65,123) but passes easily if counted as part of a three-person household ($96,728).

Texas bankruptcy courts have taken different approaches. The most common is the “heads on beds” method, which counts everyone physically living in your home.⁵ An elderly parent sleeping in your spare room counts. A college student who moved out does not, even if you still pay tuition.

Some courts instead use an “economic unit” approach, focused on financial interdependence rather than physical presence. Under that method a child away at college might still count if you pay all their bills, while a roommate who splits rent but is otherwise financially independent might not.⁵ Because no single federal definition of “household” applies, which approach controls can depend on the Texas bankruptcy division handling your case.

Above the Median: The Means Test

Being over the median just opens a second stage. In this stage you subtract allowable expenses from your income to see whether you have money left to pay creditors. Plenty of above-median Texans pass, especially those with high housing costs, large families, or significant secured debt payments.

Allowed Expenses

The means test does not simply trust what you say you spend. It uses IRS National and Local Standards to cap basic living costs.⁶ National Standards cover food, clothing, and personal care at a flat rate regardless of where you live. Local Standards cover housing, utilities, and transportation and vary by county, so a filer in Harris County receives a different housing allowance than one in Lubbock County.

On top of those capped figures, you can deduct actual costs for payroll taxes, health insurance premiums, childcare, and court-ordered obligations like child support. These use your real numbers.

Mortgage and Car Payments

Secured debt payments get their own deduction. Add up all payments contractually due on each secured debt over the 60 months following your filing date, then divide by 60 for an average monthly figure.⁷ This is separate from the IRS housing standard. If your average mortgage payment runs higher than the Local Standard for your county, the excess still reduces your disposable income. For many Texas homeowners, the mortgage deduction alone brings disposable income low enough to qualify.

The Abuse Threshold

After subtracting permitted expenses, the remaining monthly figure is multiplied by 60 to project disposable income over five years. Whether that number triggers a presumption of abuse depends on a two-tier test:

Below $10,275: no presumption of abuse. You pass.
Between $10,275 and $17,150: abuse is presumed only if the amount also exceeds 25% of your total nonpriority unsecured debt.
$17,150 or above: abuse is presumed regardless of your debt level.

These dollar figures were last adjusted effective April 1, 2025, and are periodically updated for inflation.² Confirm the current amounts before filing.

Rebutting a Presumption of Abuse

If your numbers trigger the presumption, you can still try to overcome it by showing “special circumstances” that justify higher expenses or lower income with no reasonable alternative. The statute names a serious medical condition and a call to active duty as examples.² Job loss, divorce-related expenses, and caring for a disabled family member have also been recognized in various cases. Expect to produce detailed documentation and an itemized explanation of why the circumstances require the adjustment.

Income Isn’t the Only Qualifier

Passing the income test gets you in the door. It does not control what happens to your property or which debts actually go away. Texas has broad property exemptions, including an unlimited-value homestead within set acreage limits and broad protection for retirement accounts, which is why many Texas filers lose little or nothing in Chapter 7. On the other side, Chapter 7 does not erase child support, alimony, most student loans, recent income taxes, debts from fraud, debts for willful and malicious injury, or DUI-related personal injury debts.⁸ If the debts weighing on you fall mostly into those categories, qualifying by income will not solve the underlying problem, and a conversation with a bankruptcy attorney is the right next step before filing.

1
United States Department of Justice. November 1, 2025 Median Income Table
2
Office of the Law Revision Counsel. 11 USC 707 – Dismissal of a Case or Conversion to a Case Under Chapter 11 or 13
3
Office of the Law Revision Counsel. 11 USC 101 – Definitions
4
Congressional Research Service. Veterans Benefits and Bankruptcy
5
United States Bankruptcy Court Northern District of Texas. Memorandum Opinion and Order Regarding Household Size Determination
6
United States Department of Justice. Means Testing – IRS Data
7
United States Courts. Chapter 7 Means Test Calculation
8
Office of the Law Revision Counsel. 11 USC 523 – Exceptions to Discharge