Texas’s Median Income Just Changed. Here’s What It Means for Your Case.
To qualify for Chapter 7 bankruptcy in Texas, your household income generally needs to fall at or below the state median for your household size. For cases filed on or after July 15, 2026, that means $66,837 for a single filer and $117,962 for a family of four. If your income is higher, you are not automatically disqualified. You may still pass through Step 2 of the means test once allowed expenses are factored in. A Dallas bankruptcy means test attorney at Toronjo & Prosser Law can run the full calculation for you and tell you exactly where you stand.
Who Can File for Chapter 7 Bankruptcy?
Individuals struggling with debt may be able to use Chapter 7 bankruptcy to sell off non-exempt assets and pay down their balances. This liquidation process is designed to address unsecured consumer debts such as:
- Credit card bills
- Medical bills
- Utility bills (electric, water, and similar)
- Unsecured court judgments
- Collection agency debts
- Personal loans
Not everyone is eligible. An eligible filer must earn at or below the median income in Texas for the same household size or, if income exceeds that amount, pass the means test in Step 2.
2026 Texas Median Family Income by Household Size
These figures come from Census Bureau data published through the U.S. Trustee Program and apply to cases filed on or after July 15, 2026. They will update this again in November, so the number that matters is the one in effect on the day you actually file.
| Household Size | Texas Median Annual Income |
| 1 person | $66,837 |
| 2 people | $86,714 |
| 3 people | $99,273 |
| 4 people | $117,962 |
| Each additional person | + $11,100 |
Think of this figure as a ceiling. The more people in your household, the higher that ceiling climbs. If your average income over the past six months, annualized, sits at or below your household’s number, you pass Step 1 of the means test outright.
How the Two-Step Means Test Works
Step 1: The income screen
- Average your gross household income for the six full calendar months before filing
- Multiply that average by 12 to get your annualized income
- Compare the result to the Texas median for your household size
- At or below the median: you pass and can move forward with Chapter 7
- Above the median: you move to Step 2
Step 2: The expense deduction
- Subtract IRS-standard and actual allowed expenses from your current monthly income
- What remains is your disposable income
- If disposable income over 60 months is low enough, you can still qualify for Chapter 7
- If not, Chapter 13 is typically the next option
What Counts as Income for the Means Test?
Almost all sources of income count, including wages and salary, overtime and bonuses, business and rental income, and a spouse’s income even if that spouse is not filing. Some forms of disability income are excluded. Household size generally includes the debtor, the debtor’s spouse, and dependents, and may also include unmarried individuals and their children living in the same household. Because the rules around what counts can get technical, it is worth reviewing your specific income sources with a knowledgeable Dallas bankruptcy attorney before you file.
Means Test Expense Deductions
Filers can deduct a range of household expenses to reduce the income counted toward the means test. Some of the most common deductible expenses include:
- Rent or mortgage payments
- Car payments
- Utilities
- Food and clothing
- Taxes
- Health or disability insurance premiums
- Daycare expenses
- Child support payments
Some expenses are capped at a standard IRS-set amount, while others allow you to deduct the actual amount spent. These calculations resemble tax return deductions in complexity, which is exactly why most above-median filers work with an attorney rather than rely on a generic online estimate.
Exemptions From the Means Test
The means test applies only to individuals whose debts are primarily consumer debt, so businesses with mostly non-consumer debt are exempt. You are also exempt if either of the following applies:
- You are a disabled veteran and incurred most of your debt while on active duty or performing homeland defense activity
- You are a military reservist or National Guard member called to active duty after September 11, 2001
Skip the Online Calculator. Get a Real Evaluation.
Generic means test calculators use national averages and can miss deductions specific to your situation, mortgage structure, child support order, or recent changes in income. Let Toronjo & Prosser review your actual six months of income and expenses rather than running you through a one-size-fits-all tool. If you’re weighing Chapter 7 against Chapter 13, or wondering how the means test interacts with what property you can keep, call today for a consultation.
Frequently Asked Questions
What happens if I fail the means test?
Failing Step 2 does not close the door on debt relief. Most filers in that position move forward with a Chapter 13 repayment plan instead, which restructures debt over three to five years rather than discharging it outright.
Does my spouse’s income count if they aren’t filing with me?
Generally, yes. The means test looks at total household income, so a non-filing spouse’s income is typically included even though they are not part of the case. This can differ if you are legally separated, which is worth discussing directly with your attorney.
How often do the Texas income limits change?
The U.S. Trustee Program updates the median family income figures twice a year, in April and November, based on updated Census Bureau data. The chart that applies to your case is whichever one is in effect on your actual filing date.