Montana Bankruptcy Exemptions

You can protect property you'll need to work and live in a Montana bankruptcy using Montana's exemption laws.

February 7, 2019

You won’t lose everything when filing for bankruptcy in Montana. You’ll be able to use Montana’s bankruptcy exemptions to protect the things you’ll need to work and live, such as your home, personal items, and a retirement account.

Montana Exemptions v. Federal Bankruptcy Exemptions

Some states allow residents to choose between the state and the federal bankruptcy exemptions, but that option isn’t available in Montana. You’ll use Montana’s state exemptions and, if helpful, the federal nonbankruptcy exemptions.

Common Montana Bankruptcy Exemptions

Here are some of the more common exemptions in Montana. When reviewing them, you’ll want to keep these things in mind:

  • Joint filing. Unless otherwise noted, when spouses file together in Montana, each spouse can claim the full amount of the exemption (informally called “doubling”) as long as each spouse has an ownership interest in the property.
  • List and verify your exemptions. You must claim an exemption by listing it in the official bankruptcy forms. You might qualify for exemptions not included in this article, or be required to meet qualification requirements. Consulting with a local bankruptcy attorney is the best way to ensure that you’re protecting your assets.
  • Legal citations. You’ll find each of the statutes in the Montana Code Annotated or the federal law.
  • Bankruptcy-only exemptions. Montana's exemptions apply only in bankruptcy. You can’t use them to protect your property against creditors outside of bankruptcy.

Montana Homestead Exemption

70-32-104 & 25-13-615 – Equity in real estate or mobile home you occupy up to a value of $250,000. The exemption is limited to 320 farm acres, 1/4 acre of property in a municipality, or one acre of property outside of a municipality. You must record a homestead declaration before filing.

Montana Motor Vehicle Exemption

25-13-609(2) – Equity in one motor vehicle up to a value of $2,500.

Montana Wildcard Exemption

None.

Other Montana Exemptions

Personal Property

25-13-608(1)(a) - Prescribed health aids.

25-13-608(1)(h) - Burial plot.

25-13-609(1) - 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 value.

25-13-610(1) - Proceeds for damaged or lost exempt property.

35-15-404 - Cooperative association shares up to $500.

Pensions

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 maximum (amount changes).

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(1)(e) - Qualifying retirement benefits (conditions apply).

Public Benefits

25-13-608(1)(b) & 53-2-607(1)(b) - Social Security and public assistance benefits (not including support payments).

25-13-608(1)(c) - Veterans' benefits (not including support payments).

39-71-743 - Workers' compensation.

39-73-110 - Silicosis benefits.

39-51-3105 & 31-2-106(2) - Unemployment compensation.

53-9-129 - Crime victims' compensation.

Tools of the Trade

25-13-609(3) - Tools, books, and instruments needed in a trade or profession up to $3,000.

Alimony and Child Support

25-13-608(1)(g) - Alimony and child support.

Insurance

33-15-513 - Disability insurance proceeds.

33-7-522 - Fraternal benefit society benefits.

33-15-512 - Group life insurance policy or proceeds.

33-15-514 - Annuity contract proceeds (conditions apply).

33-15-511 - Life insurance assigned policies (beneficiary cannot be the insured).

80-2-245 - Hail insurance benefits (conditions apply).

Other

Add any applicable federal nonbankruptcy exemptions.

Nonexempt Property—Property You Can’t Protect With a Montana Exemption

Some people can keep all assets, but that isn’t always true. Here’s what will happen to nonexempt property:

  • In a Chapter 7 bankruptcy, the bankruptcy trustee appointed to administer your case will sell nonexempt property and distribute the proceeds to creditors. Find out more about the bankruptcy process and the Chapter 7 documents you'll need at each stage.
  • In Chapter 13 bankruptcy, it works differently. You can keep everything you own, but you’ll pay creditors the value of the nonexempt property, your disposable income, or your nondischargeable debt (support obligations, most taxes, and the like), whichever is more, through your Chapter 13 repayment plan.

You’ll learn more about Chapter 7 and 13 in Which Type of Bankruptcy is Right for Me?

Confirming Montana Exemptions

This list includes the majority of bankruptcy exemptions available in Montana. However, doesn’t include all exemptions. Also, states often create qualification requirements for specific exemptions, and Montana might have changed the amounts since this list was last updated. Check the Montana Code Annotated or with a local bankruptcy lawyer.

To learn more about bankruptcy exemptions, the state exemption system, and the homestead exemption rules, read Bankruptcy Exemptions – What Can I Keep When I File for Bankruptcy?

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