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Filing Bankruptcy In Montana
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Filing for public bankruptcy is a choice to be made with the highest precaution. In Montana it is no different as it will provide various vicissitudes depending on the given situation and type of bankruptcy decided on by the debtor. Bankruptcy for some may be the perfect choice to get back to financial security, and for others it may be more trouble that it is worth in the end. One must remember, bankruptcy will never relieve all debts from the individual.
Options for Personal Bankruptcy in Montana
Though several forms of bankruptcy exist, most bankruptcy cases involved Chapter 7 or Chapter 13 of U.S. Code Title 11. In addition, most individuals inevitably choose to file Chapter 7 bankruptcy over Chapter 13.
Chapter 7 Bankruptcy
Before filing for what is commonly referred to as 'liquidation' or 'fresh start' bankruptcy, the debtor must pass a government mandated 'means test.' This test determines whether the debtor is below the given state's median income. In Montana, the median income figure used is $39,484 for an individual, $52,796 for couples, $52,796 for three person households, $65,175 for four person households, and an additional $6,900 for each addition family member. This method of bankruptcy results in the liquidation of all of the debtor's assets except for 'exemptions.' Nearly all of the debtors’ debts will be alleviated through the process.
Chapter 13 Bankruptcy
For those who realize they are falling into a financial rut, but maintain a consistent wage, Chapter 13 bankruptcy may be the proper course of action. It is often called 'wage earner' bankruptcy, as the debtors need a consistent income to use this bankruptcy method. All the debtors possessions are kept. However, none of the debts owed are dropped. They are to be repaid through a bankruptcy court designed 3 to 5 year payment plan. Amendments or extensions to the plan can be given through the bankruptcy court. A private individual can have no more than $1,010,650 in secured debts or $336,900 in unsecured debts to qualify for this form of bankruptcy.
Filing Bankruptcy during foreclosure.
Bankruptcy laws mandate relief from creditor actions, including foreclosure proceeding, after an individual files for Chapter 7 or Chapter 13 bankruptcy. This is called an 'automatic stay' and lasts until the courts can sort out the case. However, this is not a full guarantee of protection from foreclosure. If the individual’s bankruptcy was filed after the foreclosure procedure began, the court may allow it to go through. In addition, Chapter 13 bankruptcy specifically addresses the repayment of mortgage obligations and may allow debtors to keep their homes regardless of impending foreclosure.
Montana Bankruptcy Exemptions
In Montana, the list of 'exemptions' for the debtors of Chapter 7 bankruptcy consists of state created list. Debtors may also claim Federal Supplemental Exemptions.
|
Type of Asset(s) |
Details on Applicable Exemption(s) |
|
Homestead |
Up to $100,000 (1 acre outside municipality)to $200,000 (1/4 acre in municipality) |
|
Insurance |
to $350/month annuity proceeds, Disability, Illness, Fraternal Benefits Society, Group Life insurance, Hail insurance, and Up to $4,000 unmatured life |
|
Miscellaneous |
Alimony, child support, and Property of business |
|
Pensions |
ERISA, Firefighters, Game wardens, Highway patrol officers, Judges, Police Officers, Public Employees, Sheriffs, Teachers, and University system employees |
|
Personal Property |
Up to $4,500 household items $600 each, burial plot, Up to $500 cooperative association shares, Medical equipment, Up to $2,500 vehicle |
|
Public Benefits |
AFDC, Crime victims, Local public assistance, Silicosis, Social security, Subsidized adoption, Unemployment, Veterans', Vocational rehabilitation for the blind, and Workers' benefits |
|
Tools of trade |
Up to $3,000, Military equipment |
|
Wages |
Judge determined |
Montana Bankruptcy Court Filing Options
Use a Bankruptcy Lawyer
For the majority of individuals the knowledge of a Bankruptcy lawyer is invaluable. They will know the debtor's state specific laws and federal law nuances. By hiring a bankruptcy lawyer, one will relieve great stress. They provide aid in all aspects of the bankruptcy process.
Use a Filing Service
Providing no legal advice for a debtor's bankruptcy at all, a filing service may seem useless. However, they too can relieve stress from the debtor by doing all the paperwork, and at a much lower cost than a bankruptcy lawyer can. However, these services are not often recommended.
File “Pro Se”
To file pro se is to file without help of legal service or any other service. During a bankruptcy, this may be the only choice for some, as lawyers and other services are costly. However, this is a dangerous endeavor as most people are not familiar with federal and state laws involved in filing bankruptcy.
Courts and Montana Bankruptcy Trustee Information
Montana Bankruptcy Court Main Office
Street Address:
303 Mike Mansfield Federal Bldg
and United States Courthouse
400 North Main Street
Butte, MT 59701
Phone:
406-782-3354
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