If you are overwhelmed by debt in Big Sky County, filing for bankruptcy may offer you relief. Bankruptcy is a federal law that allows you to manage and, in some cases, eliminate, your debts. Individuals filing for bankruptcy may choose either a Chapter 7 or Chapter 13 bankruptcy.
In a Chapter 7 bankruptcy, you surrender your non-exempt property to a bankruptcy trustee, who sells them to make payments to your creditors. Many individuals own only exempt property and thus do not lose any of their property. Conversely, in a Chapter 13 bankruptcy, you may usually keep all of your property; however, you must pay your disposable income to a trustee who distributes the payments to your creditors under a court-approved plan. In either case, being a Montana resident will have important impacts upon your bankruptcy filing.
Where Are Montana Bankruptcies Filed?
Montana has one bankruptcy court : the main office is located in Butte, with satellite offices in Great Falls, Billings and Missoula. Additionally, some 341 creditors meetings are held in Kalispell.
Eligibility Requirements for Chapter 7
Chapter 7 bankruptcy is generally reserved for lower income individuals. If your average monthly income is less than Montana's median income, then you are permitted to file a Chapter 7 bankruptcy. If your average monthly income is greater than or equal to Montana's median income, then bankruptcy law presumes that you have the ability to repay at least a portion of your debts, and therefore, you cannot file a Chapter 7 bankruptcy unless you pass a means test.
Chapter 13 Bankruptcy Plans
The maximum length of your Chapter 13 bankruptcy plan is 36 months, if your average monthly income is less than Montana's median income, unless the bankruptcy court finds good cause to extend it to a maximum of 60 months. If your average monthly income equals or exceeds Montana's median income, then your plan length must be 60 months.
Are You Required to Appear in Court?
In many bankruptcy cases, you will only be required to appear before your case trustee for questioning about your finances. Your creditors may appear and ask questions at this meeting. You will usually not be required to appear in bankruptcy court.
Bankruptcy exemptions allow you to exclude property from your bankruptcy. Montana residents may not claim the exemptions under the federal bankruptcy code - you may only take advantage of the exemptions provided by state law. Montana state bankruptcy exemptions will, among other things, generally allow you to protect:
- Your homestead up to a maximum value of $250,000, if you filed a declaration of homestead before filing your bankruptcy case
- Alimony and support payments
- Your interest in certain retirement plans and benefits
- Household goods and furnishings, appliances, jewelry, clothing, books and firearms up to a maximum of $600 per item and $4,500 in total value
- Professional books and tools of trade up to a maximum of $3,000
- Motor vehicle up to $2,500 ($5,000 if married)
Additionally, you may also take advantage of federal non-bankruptcy exemptions, which allow you to protect your interest in tax exempt retirement plans, IRAs and Social Security benefits.
A Bankruptcy Lawyer Can Help
State bankruptcy laws can be complicated and the facts of each case vary. For more detailed, specific information, please contact a Montana bankruptcy lawyer.