Montana Bankruptcy Exemptions
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Like all states, Montana has its own set of exemptions that you may use when filing for Chapter 7 or Chapter 13 bankruptcy. Exemptions determine what property (such as a home, car, instrument, retirement account, etc.) you may keep in a Chapter 7 bankruptcy, and how much you must pay to certain creditors in Chapter 13 bankruptcy. Some states allow debtors to choose between the state exemption system and a set of federal bankruptcy exemptions – but Montana is not one of them. In Montana, you must use the state exemptions below. In addition to this list, you may also use any applicable amounts in the federal nonbankruptcy exemptions.
Unless noted otherwise, if a couple is married and filing jointly in Montana, each spouse may claim the full amount of each exemption. This is informally called “doubling.”
To learn more about bankruptcy exemptions, including how they work, which state exemption system you should use, and special rules for the homestead exemption, see Bankruptcy Exemptions – What Can I Keep When I File for Bankruptcy?
Special Note: Montana’s Bankruptcy-Only Exemption System
Montana, along with seven other states, has an exemption scheme that applies only in bankruptcy (which means you can’t use them against judgment creditors that try to take your property in other situations). Several courts have ruled that bankruptcy-only exemption schemes are unconstitutional. Although others have determined the opposite – that debtors may use these exemptions.
Although the majority of bankruptcy courts allow debtors to use bankruptcy-only exemption schemes, you may wish to consult with an attorney to determine what exemptions are permitted in your local bankruptcy court.
Montana Bankruptcy Exemptions
Unless otherwise noted, all law references are to the Montana Code Annotated.
70-32-105 & 70-32-104 & 70-32-201 - Real property or mobile home you occupy, to $250,000. Must record a homestead declaration before filing. Insurance, condemnation or sale proceeds exempt for 18 months.
25-13-608 - Health aids; burial plot.
25-13-609 - Motor vehicle up to $2,500; clothing, household goods and furnishings, appliances, jewelry, books, animals and feed, musical instruments, firearms, sporting goods, and crops up to $600 per item and $4,500 total.
25-13-610 - Proceeds for damaged or lost exempt property for 6 months after receipt.
35-15-404 - Cooperative association shares up to $500 value.
25-13-614 - The greather of the following: 30 times the federal minimum hourly wage or a minimum of 75% of earned but unpaid wages. Judge may approve more for low income debtor.
11 U.S.C. § 522 - Tax exempt retirement accounts (including 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans).
11 U.S.C. § 522(b)(3)(C)(n) - IRAS and Roth IRAs to $1,171,150.
19-2-1004 - Public employees.
19-19-504 & 19-18-612 - Police officers and firefighters.
19-20-706 - Teachers.
19-21-212 - University system employees.
25-13-608 - Roth IRA and IRA contributions and earnings that were made before the judgement is filed.
31-2-106 - ERISA-qualified benefits deposited at least 1 year before filing or up to 15% of debtor's gross annual income.
25-13-608 - Social Security, veterans', & local public assistance benefits.
39-71-743 - Workers' compensation.
39-73-110 - Silicosis benefits.
39-51-3105 - Unemployment compensation.
53-2-607 - Aid to aged and disabled, vocational rehabilitation to the blind, subsidized adoption payments.
53-9-129 - Crime victims' compensation.
Tools of Trade
25-13-609 - Tools, books, and instruments of trade up to $3,000.
25-13-613 - Arms, uniforms, and accoutrements needed to carry out government functions.
Alimony and Child Support
25-13-608 - Alimony and child support.
25-13-608 & 33-15-513 - Disability or illness proceeds, avails or benefits; medical or hospital benefits; unmatured life insurance contracts.
33-7-522 - Fraternal benefit society benefits.
33-15-512 - Group life insurance policy or proceeds.
33-15-514 - Annuity contract proceeds up to $350 per month.
33-20-120 - Life insurance proceeds if policy prohibits use to pay creditors.
80-2-245 - Hail insurance benefits.
Add any applicable Federal Nonbankruptcy Exemptions.
This list includes the majority of bankruptcy exemptions available in Montana. However, it may not include all exemptions, and states often create exceptions to specific exemptions. In addition, Montana may have changed the amounts since this list was last updated in June of 2011. Consider cross-checking this list with www.legalconsumer.com, which updates the state exemption amounts regularly, or check with your local bankruptcy court.