{"id":286860,"date":"2021-04-14T07:07:30","date_gmt":"2021-04-14T12:07:30","guid":{"rendered":"https:\/\/ability-fl-prod.internetbrands.com\/ability-law\/bankruptcy\/bankruptcy-laws-by-state\/montana-bankruptcy-exemptions-and-law.html"},"modified":"2026-07-30T11:53:42","modified_gmt":"2026-07-30T16:53:42","slug":"montana-bankruptcy-exemptions-and-law","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/bankruptcy\/bankruptcy-laws-by-state\/montana-bankruptcy-exemptions-and-law.html","title":{"rendered":"Montana Bankruptcy Exemptions and Law"},"content":{"rendered":"\n
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Montana Bankruptcy Exemptions and Law<\/h1>\n\n
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\n By Susan Buckner, J.D.<\/a> | Legally reviewed by Catherine Hodder, Esq.<\/a>\n | Last updated\n
\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n\n\n

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Key Takeaways<\/h2>\n

Filing for bankruptcy in Montana<\/span> allows individuals and businesses to eliminate or restructure overwhelming debt under the oversight of the U.S. Bankruptcy Court<\/span> for the District of Montana<\/span>. Eligible debtors must satisfy a 730-day state residency requirement to utilize Montana<\/span>‘s specific legal protections, which shield crucial assets like a homestead, a motor vehicle<\/span>, and tools of the trade from liquidation<\/span>.<\/p>\n\n <\/div>\n <\/div>\n<\/div>\n\n\n

Filing for bankruptcy in Montana<\/span> lets debtors recover financially and get a fresh start<\/span> while keeping most of their exempt assets and homestead property. Montana<\/span> bankruptcy exemptions<\/span> allow you to protect most of your property while paying off debts or discharging unsecured debts that are preventing you from moving forward with your life.<\/p>\n

The bankruptcy process is governed by federal law<\/span> and overseen by federal bankruptcy courts<\/span>. The U.S. Bankruptcy Code<\/span><\/u><\/a> allows states to enact rules to help residents shield their property from creditors. Montana<\/span> has its own set of exemptions for state residents. When you file for bankruptcy in Montana<\/span>, you must use these exemptions.<\/p>\n

To file for bankruptcy in Montana<\/span>, you must have resided in the state for 730 days (two years). If not, you must file under the rules of the state where you resided prior to living in Montana<\/span>, or use the federal exemptions.<\/p>\n

Before filing your bankruptcy petition<\/span>, you must complete a credit counseling<\/span> course. The Bankruptcy Trustee<\/span>\u2019s website<\/a> has a list of approved credit counseling<\/span> agencies for petitioners. You must also pay the filing fee of $338 for a Chapter 7 or $313 for a Chapter 13. You can apply to pay in installments<\/span> or file a fee waiver if your income is below a certain amount.<\/p>\n

Filing Bankruptcy<\/span> in Montana<\/span><\/h2>\n

There are two basic types of consumer bankruptcy: Chapter 7 and Chapter 13. Debtors should get legal advice<\/span> from a bankruptcy attorney<\/a> before filing to determine which one best fits their needs.<\/p>\n

Chapter 7 Bankruptcy<\/span><\/h3>\n

A Chapter 7 bankruptcy<\/span><\/a>, or liquidation<\/span> bankruptcy, is commonly filed by those who have a lot of unsecured debt but few valuable non-exempt assets. In Chapter 7, the bankruptcy trustee<\/span> takes control of your non-exempt property<\/span> and sells it to pay off your unsecured creditors<\/span>. Any unpaid debt is discharged by court order.<\/p>\n

To qualify for Chapter 7, debtors must pass a means test<\/span><\/a>. If your annual income is below the median annual income for Montana<\/span>, you automatically qualify. If not, the courts look at your debt load and monthly expenses to determine if you can reasonably pay your debts and still make your monthly living costs. This may allow you to qualify for a Chapter 7. Otherwise, you must file a Chapter 13 bankruptcy<\/span>.<\/p>\n

Chapter 13 Bankruptcy<\/span><\/h3>\n

A Chapter 13<\/a>, or reorganization<\/span> bankruptcy, is used by people who have assets they don\u2019t want to lose in liquidation<\/span>. It\u2019s a popular choice for those who don\u2019t want to lose their house for being behind on mortgage payments. Under Chapter 13, you and the bankruptcy trustee<\/span> work out a three- to five-year repayment plan<\/span> that lets you pay off your debts. If you stay current on the payment plan<\/span>, the judge will discharge any remaining deficiencies when it\u2019s done.<\/p>\n

To qualify for Chapter 13, you must have a steady income and the ability to meet your monthly living expenses while making your agreed-upon payments to your creditors. If you fall behind on your payments during the bankruptcy, a judge may order you to refile as a Chapter 7.<\/p>\n

Automatic Stay<\/span><\/h3>\n

Both types of bankruptcy<\/span> begin with an automatic stay<\/span><\/a>. The automatic stay<\/span> freezes all debt collection<\/span> activity as soon as you file your bankruptcy case<\/span> and prevents any collection actions from going forward, including:<\/p>\n