Debtors filing for Chapter 7 bankruptcy are required to take a “means test” which is designed to determine if the debtor has the ability to repay a substantial portion of his/her debts within a three to five year period.

However, there are some exceptions to the means test:

  • Social Security Income:  Income from social security is not taken into consideration during the bankruptcy means test.  For example, if a debtor filing for bankruptcy has $1000 in social security income and only $300 in debt, the social security still would not be counted as income.
  • Non-Consumer Debt: Debtors filing for bankruptcy, who have mostly non-consumer debts such as business debts, are not required to take the means test.  For example, a debtor earning $10,000 a month with mostly non-consumer debt would still qualify for Chapter 7 bankruptcy.
  • National Guard Members and Reservists: Active duty National Guard Members or Armed Forces Reservists are excluded from the means test for the duration of their active duty plus 540 days afterwards, if they have served at least 90 days.

To find out more about the bankruptcy means test and how bankruptcy can work for you contact a Dallas-Fort Worth bankruptcy attorney today.