Bankruptcy

Montana Bankruptcy Exemptions

When you are declared bankrupt in the state of Montana under chapter 7 of the bankruptcy, most of your assets and properties are sold off in order to pay off your debts using the proceeds thus received. But, as per the state laws, you can also avail certain Montana bankruptcy exemptions, which allow you to either keep some of your properties or receive a part of its equity value in cash. Montana laws do not allow you to use federal set of exemptions to replace the state-specified exemptions, but you can avail federal supplemental exemptions additionally. Following is a brief overview on what kind of assets and properties can be exempted and up to how much value. However, you are strongly recommended to contact a Montana bankruptcy attorney to get a more accurate evaluation on what kind of exemptions you may qualify for based on the various factors involved in your specific case.

Wild Card

In the state of Montana, no exemptions are allowed under the wild card category.

Wages

Wages are exempted in the following manner: The minimum hourly wage as per federal laws multiplied by thirty or at least seventy-five percent of unpaid but earned weekly earnings, whichever is greater. In some cases, where the debtors have a very low level of regular monthly income, the bankruptcy court may offer higher Montana bankruptcy exemptions in this category.

Tools Of Trade

If you are in a government job that requires you to have certain accoutrements, arms, and uniforms, you can keep the same in full value. Besides that, you can also exempt tools of trade, such as books and implements, up to a maximum value of $3000 (aggregate total, not per item).

Public Benefits

Several types of public benefits are also allowed to be exempted 100%. The list of exemptible public benefits include workers’ compensation, vocational rehabilitation to blind needy persons, veterans’ benefits, unemployment compensation, subsidized adoption payments to needy persons, social security, silicosis benefits, local public assistance, crime victims’ compensation, and aid to disabled, aged, or needy persons.

Personal Property

Montana bankruptcy exemptions are also available for certain types of personal properties. For example, 100% can be exempted from the proceeds for damage or from the sale of exemptible properties for a maximum period of six months after received. Equity in motor vehicles is exemptible up to a maximum value of $2500. Health aids can be exempted in full value. If you own cooperative association shares, you can exempt the same up to $500 in value. 100% exemptions can be availed for burial plots. Other personal properties and assets that can be exempted include jewelry, clothing, sporting goods, firearms, books, musical instruments, crops, animals with feed, goods, household furnishings and appliances up to a total value of $4500 (maximum $600 per item).

Pensions

100% Montana bankruptcy exemptions can be availed for pensions received by university system employees, teachers, public employees, police officers, and firefighters. Besides that, IRA contributions and earnings made before the filing of bankruptcy petition is also safe. Furthermore, you can also keep up to 15% of your gross annual income.

Miscellaneous

Under the miscellaneous category, you can exempt 100% from the proceeds of child support and alimony payments (if any).

Insurance

Debtors can avail Montana bankruptcy exemptions in full for certain types of insurance benefits that include un-matured life insurance contracts, hospital, surgical, or medical care benefits, hail insurance benefits, group life insurance policy or proceeds, fraternal benefit society benefits, and illness or disability benefits, avails, or proceeds. Besides that, life insurance proceeds can also be exempted in full value provided the policy includes a specific clause that strictly prohibits the use of the proceeds to pay off debts that are outstanding in the name of the policyholder (debtor). Annuity contract proceeds however can be exempted up to a maximum value of $350 every month.

Homestead

Proceeds from insurance, condemnation, or sale related to the exemptible homestead properties can be exempted for a maximum period of one and a half year. Debtors, in this category, can avail Montana bankruptcy exemptions for mobile home or any other real property up to $250000 in equity value. The Montana bankruptcy laws also specify that a debtor must record homestead declaration before perdition filing in order to be eligible to avail the exemptions.


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One Response to “Montana Bankruptcy Exemptions”

  1. kelvin says:

    The residents of state of Montana can not get the benefits of being bankrupt, here you will not get any exemptions like many other states, residents of Montana can not choose federal set of exemptions, they have to choose state specific exemptions only. You can not get exemptions under various categories for which the residents of other states can easily get exempted. Exemptions under the wild card category are also not allowed in the state of Montana. Wages can also be exempted after some deduction; it can be changed in the case of a person with low monthly income. If you need some important tools for your job, you can keep them under the category of tools of trade. Public benefits can also get exempted like worker’s compensation, crime victim’s compensation etc. Some categories of personal property can also get exempted like some percentage of money from the sale of exemptible property. Some jewellery, musical instruments, crops can also be exempted. It is advisable to consult an attorney before filing the petition for bankruptcy.

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