If you live in Montana and want to file for Chapter 7 or Chapter 13 bankruptcy, you must first take a credit counseling course prior to filing (this can be done online or over the phone). After receiving credit counseling, you must complete the bankruptcy petition as well as other required forms and file them with Montana’s bankruptcy court.
Because most of bankruptcy is governed by federal bankruptcy laws, the general bankruptcy filing process in Montana is similar to other states. However, Montana has its own local rules and you may be required to file additional Montana-specific bankruptcy forms. Also, which bankruptcy exemptions you will be allowed to use depends on Montana law.
(For more articles on the filing process, see Filing for Bankruptcy.)
Here’s what you need to know if you are filing for bankruptcy in Montana.
In order to file for Chapter 7 or Chapter 13 bankruptcy, you must receive credit counseling from an agency approved by the U.S. Trustee in Montana within the six month period prior to filing. You’ll also have to take a debtor education course before you can get a bankruptcy discharge. (To learn more about this requirement, including the rare exceptions, see Credit Counseling & Debtor Education Requirements in Bankruptcy.)
Each state has a unique set of bankruptcy exemptions that determine what property you get to keep in Chapter 7 bankruptcy, and help determine how much you repay unsecured creditors in Chapter 13 bankruptcy. (To learn more, see our Bankruptcy Exemptions area.)
Certain states allow you to choose between state exemptions and the federal bankruptcy exemptions. But in Montana you must use Montana exemptions. However, even though Montana does not allow you to use federal bankruptcy exemptions, it offers many comparable exemptions including a generous homestead exemption.
To learn about Montana’s exemptions for your home and car, see The Homestead Exemption in Montana and The Motor Vehicle Exemption in Montana. To find other Montana exemptions, see Montana Bankruptcy Exemptions.
When you file for Chapter 7 or Chapter 13 bankruptcy, you must complete a bankruptcy petition, a number of schedules containing detailed information about your finances, and several other forms, including a lengthy form known as the “means test” (for Chapter 7) and a similar form for Chapter 13.
For more information about each of the official forms, including how to find them and fill them out, see Completing the Bankruptcy Forms.
When you file for bankruptcy in Montana, your income gets compared to the median income for a household of your size in Montana. If your income is less than the median, you will be eligible to file for Chapter 7 and, if you choose to file for Chapter 13, you can use a three-year repayment plan (rather than five years). This is called the means test.
If your income is above Montana's median income, you still might qualify for Chapter 7, but you’ll have to provide detailed information about your expenses and payments on secured debts in order to find out. Most Chapter 13 filers also have to provide this information.
For information about each of these forms, see:
Here’s how to find the Montana-specific figures for these means test forms:
Montana median income figures. Currently, the median income in Montana is $38,369 for a single-person household, $49,743 for a household of two people, $56,308 for a three-person household, and more for larger families. These figures change periodically. You can find the most current figures for each household size here.
Example. Greg and Emma are married and have one child. They all live together in the same house. Greg and Emma’s combined annual income is $55,000. Since they have a three-person household and their combined income is below $56,308, Greg and Emma qualify to file for Chapter 7 bankruptcy without having to fill out the entire means test form.
Montana standard deduction figures. Forms 22A and 22C list categories of living expenses such as housing, transportation, food, and childcare. For some of those categories (like childcare), you provide the actual amount you spend. For others, you plug in a predetermined amount -- sometimes that figure is a national standard, other times the number varies by county or region.
You can find all of the Montana county and region-specific figures you’ll need for Forms 22A and 22C on the U.S. Trustee’s website at www.justice.gov/ust. Click on “Bankruptcy Reform” and then “Means Testing Information.”
Example. Housing and utility expense standards vary by county depending on how expensive it is to live there. If you live in Carter County, your mortgage or rent deduction is $813 for a one-person household. But if you live in Blaine County, the deduction is significantly lower at $455. You can find housing expense standards for each Montana county here.
Some judicial districts and bankruptcy courts require bankruptcy filers to complete additional “local forms.” To find out if your court requires additional forms, contact the bankruptcy filing clerk. Some courts post these forms online on the court’s website. (Below you’ll find a link to Montana’s bankruptcy court)
You can use the Court Locator tool on the U.S. Trustee’s website to find bankruptcy court locations and websites. For more information on Montana’s bankruptcy court, see District of Montana Bankruptcy Court.