Bankruptcy in Montana
When bills pile up and collection calls don’t stop, it’s easy to feel trapped. Whether it’s medical expenses, job loss, or simply trying to make ends meet, financial pressure can build fast—and leave you wondering if there’s a way out.
For Montana residents, filing for bankruptcy can offer a fresh start. It can stop wage garnishments, delay foreclosures, and discharge certain debts entirely.
We connect Montana residents with experienced bankruptcy attorneys who understand the state’s rules. If you’re ready to explore your options, reach out today and take the first step toward financial relief.
Types of Bankruptcy in Montana
Bankruptcy is a legal remedy that allows individuals and businesses to eliminate or restructure their debts when repayment is no longer realistic. In MT, you must demonstrate that financial hardship prevents you from keeping up with your obligations to qualify.
If you’re falling behind and can’t see a path forward, bankruptcy may be a practical option. Depending on your circumstances, you might be eligible to file under Chapter 7, Chapter 11, or Chapter 13. The right choice depends on several factors, including your income and the assets you want to protect.
In Montana, bankruptcy cases are handled by the U.S. Bankruptcy Court for the District of Montana. The main courthouse is located in Butte, with hearings also held in Billings, Great Falls, Missoula, and Helena depending on your location.
Chapter 7 Bankruptcy
For many individuals, Chapter 7 bankruptcy offers a chance to reset their financial situation and move forward with less burden. But before filing, it’s important to take an honest look at your income, monthly obligations, and overall ability to pay. A bankruptcy attorney in Montana can help you decide if this type of liquidation plan fits your circumstances and explain what to expect during the process.
Chapter 7 is typically suited for people who have limited income or who’ve experienced a significant financial setback that makes it impossible to keep up with their debts. While it can discharge many unsecured debts, the tradeoff is that you may need to surrender certain assets, including your car, home, or other valuables.
Once your case is filed, an automatic stay goes into effect, which temporarily halts most collection efforts, such as foreclosure or wage garnishment. That said, it won’t stop everything. You’ll still be responsible for debts like child support and criminal restitution.
To qualify for Chapter 7 bankruptcy in Montana, you’ll need to pass a means test, which determines if your income is low enough to file. The first step is comparing your household income to the state median, currently around $55,816 for a single filer. If your income falls below this amount, you likely qualify.
If it’s higher, the court will examine your monthly expenses to calculate your disposable income. This step is crucial because it helps ensure that Chapter 7 relief is reserved for those who truly lack the means to repay their debts.
Chapter 11 Bankruptcy
Chapter 11 bankruptcy is more intricate than other forms of bankruptcy and is most commonly used by businesses or individuals with significant assets or complex financial situations. It allows filers to reorganize their debts through a structured repayment plan, typically lasting between four and eighteen months.
One of the main advantages is that it doesn’t require the liquidation of property to pay creditors. Instead, debtors work with their creditors to negotiate new terms that make repayment more manageable while keeping essential assets intact.
Filing for Chapter 11 bankruptcy involves a detailed and documentation-heavy process. You must provide a complete financial overview, including your income, assets, debts, and a proposed reorganization plan that shows how you intend to repay what you owe. The court and your creditors rely on this information to assess the feasibility of your plan and ensure that it meets legal standards.
Required forms include:
- Voluntary Petition for Individuals Filing for Bankruptcy (Form B101)
- Schedules of Assets and Liabilities (Forms B106A/B through B106J)
- Statement of Financial Affairs (Form B107)
- Summary of Assets and Liabilities (Form B106)
- Chapter 11 Statement of Current Monthly Income (Form B122B)
- Creditor Matrix (list of all creditors and contact information)
- Schedule of Executory Contracts and Unexpired Leases (Form B106G)
- Disclosure Statement and Proposed Reorganization Plan
Chapter 13 Bankruptcy
Chapter 13 bankruptcy—often called the wage earner’s plan—is designed for people with a regular income who need time to pay back what they owe. In MT, once your case is filed, the court appoints a trustee to review your debts, assets, and overall ability to meet monthly obligations.
This type of bankruptcy sets up a repayment plan that usually lasts three to five years, giving you a way to reorganize your debt rather than erase it all at once. The structure of your plan depends on your income and which assets you want to protect, and in some cases, you may also qualify for partial debt discharge by the end of the term.
The Bankruptcy Process in Montana
There’s no perfect time to file for bankruptcy—but if your debt is too large to manage within the next five years, it might be the right step. Filing can ease financial pressure, stop collection efforts, and give you a structured way to start fresh.
In Montana, the process begins by organizing your financial paperwork. You’ll need to provide a full account of your income, expenses, debts, and assets. The court uses this information to assess your eligibility and build a clear picture of your financial situation. Missing or inaccurate details can lead to delays—or even cause your case to be dismissed—so thorough preparation is key.
In Montana, residents filing for bankruptcy must decide whether to use the federal exemption system or the state’s own set of exemptions, which can protect certain property during the process. Choosing the right exemption strategy is essential to keeping the assets you rely on while addressing your debts through bankruptcy.
Montana exemptions include:
- Homestead: Up to $350,000 in equity in your primary residence
- Motor vehicle: Up to $4,000 in equity
- Personal property: Includes up to $4,500 in household goods, plus clothing, appliances, and furnishings (reasonable value)
- Tools of the trade: Up to $3,000 in work-related tools or equipment
- Wages: A portion of earned but unpaid wages is protected
- Public benefits: Fully exempt, including Social Security, workers’ compensation, and unemployment
- Retirement accounts: Most tax-deferred retirement accounts and IRAs are fully protected
Work With an Experienced Montana Lawyer
Montana’s exemption laws offer important protections, but the process is complex and requires careful planning. Filing without the right guidance can lead to costly mistakes or missed opportunities to preserve your assets.
That’s why working with an experienced bankruptcy attorney is so important. They can help you understand your options, protect what matters most, and guide you through each step of the process.
Submit a request online or call us today at (866) 345-6784 to get in touch with an experienced lawyer in your area!
About the Author
Aaron is a professional legal writer with a B.S. in English Education from Southern Illinois University – Carbondale. He has written, published, and edited thousands of legal articles for RequestLegalHelp, which has connected over 5 million people to legal help in the United States.
With over five years of experience writing thousands of legal articles for law firms across the U.S. and Canada, Aaron specializes in covering federal, state, and city-level legal issues ranging from auto accidents to wrongful terminations.
There are still other areas of law in Montana that could affect your case. Check out more details on the other articles on our site.
