There are certain factors that are associated with financial matters. Some common reasons include heavy debt, foreclosure, divorce, sudden illness, or loss of a job.
In fact, the average credit card debt in Montana is a whopping $5,071 per person. In addition, foreclosure rates are also as staggering, one out of every 11,368 MT homes is currently in foreclosure.
If you find yourself struggling with similar situations, then you are more than likely struggling with other personal issues that come with living in debt. The fear of losing your vehicle, home or your income can drain a person emotionally & physically. You have probably even considered Declaring Bankruptcy .
If you are thinking “Can I File Bankruptcy?” you are undoubtedly not alone. Almost 1 million people file bankruptcy each year in the United States. Bankruptcy is a device provided by the US Government to help struggling Americans find relief from heavy debt. You may want to consider filing bankruptcy if it’s best for you.
What Is Bankruptcy?
Bankruptcy offers people the time to lift their financial burden while still working with lenders in a legal capacity. It is started by a person filing a Petition with their nearest bankruptcy court. The Petition can be filed by a person or married couples jointly. When the bankruptcy is settled, the filer will ‘exit’ with a fresh new start.
Throughout the bankruptcy process, a trustee is appointed to oversee the particulars of the case. His or her responsibilities will vary and depend on whether the person has filed for Chapter 13 or Chapter 7 bankruptcy.
Did you know that Montana ranks #44 in the nation for bankruptcy filings. In 2017 the number of personal bankruptcies was approximately 152 out of every 100,000 residents.
What Is The Difference Between Chapter 7 And Chapter 13?
People in Montana, who claim bankruptcy, will elect to file under Chapter 13 or Chapter 7 of the U.S. Bankruptcy Code. Want to know the difference? Look below for more information
In exchange for dissolving all past due debts, the trustee of the bankruptcy will liquidate the assets, such as cars, homes, and other property of value in a Chapter 7 Bankruptcy proceeding.
Debtors that were listed on the bankruptcy filing will be repaid with the proceeds collected during liquidation
If you have the means to pay some of your debts, a chapter 13 bankruptcy plan may work for you. The individual will be allowed to keep his or her valuable assets over a 3- to 5-year time frame.
In order to decide which type of bankruptcy an individual can file, he or she will have to determine their ability to repay under the Bankruptcy Means Test.
What Is A Bankruptcy Means Test?
The objective of the Bankruptcy Means Test is to determine who is eligible to apply for debt forgiveness through a Chapter 7 Bankruptcy. It considers your:
- income and expenses
- household size and composition
- debt-to-income ratio
If you do not qualify for Chapter 7 bankruptcy, you will be able to file for Chapter 13, as above-described.
What Are Bankruptcy Exemptions?
Specific states have certain exclusions that are enacted by congress as federal bankruptcy exemptions for filers. These exemptions will determine what you are able to retain throughout and after Chapter 7. In a Chapter 13 situation, the exemptions will determine what amount you will have to pay certain financial institutions in your repayment plan.
- Real property or mobile home you occupy, to $250,000 (applies 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. Insurance, condemnation or sale proceeds are exempt for 18 months.
- Prescribed health aids.
- Burial plot.
- 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.
- Proceeds for damaged or lost exempt property (conditions apply).
- Cooperative association shares (conditions apply).
- The greater 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.
- 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).
- IRAS and Roth IRAs to $1,283,025
- Public employees.
- Police officers and firefighters.
- University system employees.
- Qualifying retirement benefits (conditions apply).
- Social Security and public assistance benefits (not including support payments).
- Veterans’ benefits (not including support payments).
- Workers’ compensation.
- Silicosis benefits.
- Unemployment compensation.
- Crime victims’ compensation.
Tools of Trade
- Tools, books, and instruments needed in a trade or profession up to $3,000.
Alimony and Child Support
- Alimony and child support.
- Disability insurance proceeds.
- Fraternal benefit society benefits.
- Group life insurance policy or proceeds.
- Annuity contract proceeds (conditions apply).
- Life insurance assigned policies (beneficiary cannot be the insured).
- Hail insurance benefits (conditions apply).
Want to know if you can include Student Loans in Bankruptcy or Medical Bills in Bankruptcy? Check out our Bankruptcy FAQ’s section.
Filing Bankruptcy Alone vs. Filing With An Attorney
Current bankruptcy laws do not require filers to hire a lawyer to declare bankruptcy relief. Individuals are permitted to represent him or herself as a pro se debtor. You will simply contact the local bankruptcy court and obtain all forms and requirements directly through them. Going it alone is not recommended.
Filing Bankruptcy without an Attorney
A basic Chapter 7 case that doesn’t have a lot of debtors or assets may be easy to manage on your own.
A basic bankruptcy that doesn’t involve an attorney might look like:.
- Your income is below the state median;
- You have no property;
- Your debts will be considered dis-chargeable.
Working With An Attorney
Most of the time, it is usually in one’s best interest to work with a bankruptcy attorney. A bankruptcy attorney is there to represent you and not the creditors.
An attorney is also accustomed with exemption laws. Plus, they can come up with creative strategies to keep your assets through practical repayment strategies that are fair to everyone involved.
While you may have the fight and ability to manage a Bankruptcy on your own, it tends to make things a lot easier on an already stressful situation, especially when there is so much at stake.
What Does Bankruptcy Include?
Once you file for bankruptcy in MT, the courts put in place an order called an Automatic Stay. This order will stop debt collection calls, wage garnishments, and additional claims. Keep in mind that payments regarding child support and criminal cases will still need to be made during this time.
In any event, Bankruptcy will be able to include:
- credit card debt
- protection from eviction
- avoidance of foreclosure
- utility bills
- medical expenses
Again, unless you are filing a complex Chapter 13 case, you will lose all assets associated with a Chapter 7 Bankruptcy protection. You will, however, be able to prevent any and all collections from occurring as long as they were incurred before the date of filing and discharge.
Final Thoughts And Considerations On Filing For Bankruptcy In Montana
As you can see, there a lot of information associated with successfully filing for bankruptcy and then exiting it unscathed or satisfied. Only a licensed bankruptcy attorney can guide you through this arduous process, particularly when it comes to complex cases. Be sure to hire someone you respect and trust.
Bankruptcy Courts In MontanaMike Mansfield Federal Building and United States Courthouse
400 North Main Street
Montana Bankruptcy Court
Russell E. Smith Federal Building
201 East Broadway Street
Montana Bankruptcy Court
Additional Montana Resources
Foreclosure Help Program
Disability SSDI Benefits