Montana Bankruptcy Exemptions

You can keep some of your property in Chapter 7 bankruptcy with Montana's bankruptcy exemptions.

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If you file for Chapter 7 bankruptcy in Montana, you can protect some or all of your property with Montana’s bankruptcy exemptions. The bankruptcy exemptions in Montana also play a role in Chapter 13 bankruptcy. Read on to learn about what property is covered by Montana’s bankruptcy exemptions.

For a general overview of bankruptcy exemptions, how they work, and which ones you can use, visit the Bankruptcy Exemption topic page.

Montana Requires Debtors to Use State Exemptions

Montana has opted out of the federal exemption scheme, meaning you are not permitted to use the federal bankruptcy exemptions when you file a bankruptcy in Montana. If you file for bankruptcy in Montana, you may only exempt property using the Montana exemptions.

Although you can’t use the federal exemptions in Montana, you may use any of the applicable federal non-bankruptcy exemptions. The federal non-bankruptcy exemptions protect property such as federal retirement accounts and veterans’ benefits.

Married Couples May Double Montana Exemptions

Married couples filing a joint bankruptcy in Montana may double the exemption amount. This means that each spouse may claim the full exemption amount for any property in which the spouse has ownership interest. For example, if both spouses own a car and they file jointly, they can double the amount of their personal property exemption in order to protect the car’s value.

Montana’s Exemptions Apply Only In Bankruptcy

Montana is one of a few states in which the exemption scheme applies only in bankruptcy, meaning you can’t use the exemptions to protect your property in proceedings outside of bankruptcy. Some courts have held that bankruptcy-only exemption schemes are unconstitutional, while others have determined that debtors may use these exemptions.

Common Montana Exemptions

Below are some of the most common exemptions available under Montana law. Unless otherwise noted, all references are to the Montana Code Annotated.

Homestead or Residential Property

The homestead exemption protects equity in your home. In Montana, you can exempt up to $250,000 of equity in the real estate or mobile home in which you live. You may also protect proceeds from insurance, condemnation, or the sale of the home in which you lived for 18 months. You are required to file a homestead declaration before filing bankruptcy in order to protect your home. Mont. Code Ann. §70-32-104, 201, 213

For more details about how the homestead exemption works in Montana, see The Montana Homestead Exemption.

Insurance Benefits

Life insurance proceeds if the contract language prohibits the proceeds from bring used to pay the beneficiary’s creditors. Mont. Code Ann. §33-20-120

Medical, surgical, or hospital care benefits. Mont. Code Ann. §25-13-608

Group life insurance policy and proceeds. Mont. Code Ann. §33-15-512

Hail insurance benefits. Mont. Code Ann. §80-2-245

Fraternal group society benefits. Mont. Code Ann. §33-7-522

Unmatured life insurance contracts that you own. Mont. Code Ann. §25-13-608

Annuity contracts up to $350 per months. Mont. Code Ann. §33-15-514

Motor Vehicle

In Montana, you can protect up to $2,500 of equity in one motor vehicle. Mont. Code Ann. §25-13-609

To learn more about how to exempt your motor vehicle under Montana law, visit The Montana Motor Vehicle Exemption in Bankruptcy.

Personal Property

Furniture, appliances, animals, feed, and crops, musical instruments, books, firearms, sporting goods, jewelry, and clothing, up to $600 per item and $4,500 total. Mont. Code Ann. §25-13-609

Health aids and a burial plot. Mont. Code Ann. §25-13-608

Cooperative association shares. Mont. Code Ann. §35-15-404

Proceeds from insurance or the sale of exempt property for six months after receipt, if traceable to the exempt property. Mont. Code Ann. §25-13-610

Domestic Support

Alimony and child support. Mont. Code Ann. §25-13-608

Pension, Retirement, and Life Insurance Benefits

Public employee retirement benefits. Mont. Code Ann. §19-2-1004, §25-13-608

ERISA qualified benefits deposited more than one year before filing bankruptcy, or up to 15% of your gross annual income. Mont. Code Ann. §31-2-106

Firefighters’ retirement benefits. Mont. Code Ann. §19-18-612

Police officers’ retirement benefits. Mont. Code Ann. §19-19-504

IRA contributions made prior to judgment being filed. Mont. Code Ann. §25-13-608

Teachers’ retirement benefits. Mont. Code Ann. §19-20-706, Mont. Code Ann. §25-13-608

University system employees’ retirement benefits. Mont. Code Ann. §19-21-212

Public Benefits

Local public assistance. Mont. Code Ann. §25-13-608

Unemployment compensation. Mont. Code Ann. §31-2-106, Mont. Code Ann. §39-51-3105

Veterans’ benefits. Mont. Code Ann. §25-13-608

Vocational rehabilitation to blind needy persons. Mont. Code Ann. §53-2-607

Silicosis benefits. Mont. Code Ann. §39-73-110

Crime victims’ compensation. Mont. Code Ann. §53-9-129

Aid to aged, disabled, needy persons. Mont. Code Ann. §53-2-607

Tools of the Trade

Tools and implements of your trade up to $3,000. Mont. Code Ann. §25-13-609

Military uniforms and arms. Mont. Code Ann. §25-13-613

Confirming Montana’s Bankruptcy Exemptions

Montana’s exemption amounts are adjusted periodically. To make sure you have the most recent figures, be sure to check for any updates at the official website of the State Law Library of Montana at http://courts.mt.gov/library/default.mcpx.

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