Montana Bankruptcy

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Summary

Not everyone that has to file a Chapter 7 bankruptcy in Montana, can afford to pay the court filing fee. If your income is less than 150% of the federal poverty guidelines and you submit this application for a waiver to the court along with the rest of your bankruptcy forms, you may be able to file your case for free.

With the cost of living at an all-time high and gas prices only going up at the moment, it is not unusual that folks who were getting by just fine last year are now one unexpected medical bill away from complete financial ruin. The fact is, most people seeking protection under the Montana bankruptcy laws are normal folks who, unlike the notorious founder of the Yellowstone Club in Big Sky, ended up getting in over their head financially without much fault of their own. Sometimes life happens and assuming you did not make off with millions of dollars belonging to your creditors like Mr. Blixseth appears to have, you are able to get a fresh start by filing a Chapter 7 bankruptcy in Montana. It's not something anyone is ever happy about doing, but it is something that can make your life, and, more importantly, the life of your family better by taking the burden off your shoulders. You can always voluntarily repay creditors after things turn around, but right now, you should not have to choose between paying your bills or putting food on the table. This guide will provide you with a brief overview of the Montana bankruptcy process works.

How to File Bankruptcy in Montana for Free

Not everyone that has to file a Chapter 7 bankruptcy in Montana, can afford to pay the court filing fee. If your income is less than 150% of the federal poverty guidelines and you submit this application for a waiver to the court along with the rest of your bankruptcy forms, you may be able to file your case for free.


Collect Your Montana Bankruptcy Documents

A full and honest disclosure of all aspects of their financial situation is the foremost obligation of every person seeking protection from their creditors by filing a Montana bankruptcy case. In order to help you make sure that you meet all of the disclosure requirements, you should take the time to collect certain documents before ever getting started completing the forms you will have to file with the court for your Chapter 7 bankruptcy in Montana. In addition to a list of your assets, you have to provide the court with a complete listing of all of your debts, including up-to-date addresses for all of your creditors and their collection agencies. The best way to ensure you are not missing anyone, is to collect every letter you have received from your creditors in the last 90 days and get a copy of your actual credit report from each one of the three reporting agencies. By cross referencing the information contained in these documents, you will be able to provide the court with a full picture of your liabilities when filing bankruptcy in Montana. Other documents that you should collect at this stage are your paycheck stubs from the last 6 months, recent bank statements and your most recent federal income tax return.

Take Credit Counseling

Although it's easy to feel like there are no options when you're not sure how to make ends meet every month, that is actually untrue. That is why Congress has added a mandatory credit counseling class to the requirements everyone filing bankruptcy in Montana has to complete. In fact, if you don't take the required credit counseling course you are not eligible to be a debtor in bankruptcy. The course is intended to ensure that you know what your options before your Chapter 7 bankruptcy in Montana is filed. Once done, you have up to 180 days to start your bankruptcy case, so it makes sense to get this done early on in the process. Since the course is a requirement for a proceeding in a federal bankruptcy court, you have to make sure you take it from a company pre-approved to offer the course to folks filing bankruptcy in Montana. The United States Trustee publishes an updated list of all approved providers on their website every week. While you can take the course either online or by phone, there are no in-person classes available in for folks filing a Montana bankruptcy at this time.

Complete the Bankruptcy Forms

Once you've collected all your bankruptcy documents and completed the required counseling course, it's time to start filling out the bankruptcy forms to be filed with the court for your Chapter 7 bankruptcy in Montana. The good news is that all of the forms can be downloaded for free. The same is true for the 49-page instruction manual that the federal courts have created for folks filing bankruptcy in Montana or elsewhere in the United States. As mentioned, full disclosure is required in response to all of the questions contained in the forms. Depending on your specific situation, Upsolve may be able to help you with this process. Of course, if you hire a lawyer, their office will complete the forms for you Chapter 7 bankruptcy in Montana based on the information and documents you submit to them. Ultimately, however, it will be your signature on the documents. So, regardless of how you do it, it is your responsibility to make sure that all the required information is disclosed.

Get Your Filing Fee

The fee for filing a Chapter 7 bankruptcy in Montana is $335. If your income is more than 150% of the federal poverty guidelines, you are not eligible to have your court filing fee waived. If you don't have to file right away, set aside whatever amount you can spare each pay period in cash until you have the full amount. The Montana Bankruptcy Court accepts payments in cash (exact change only), money order, or cashier's check. You can purchase a money order at the post office. If you do that, or get a cashier's check instead, it should be made payable to the U.S. Bankruptcy Court. If you can't wait to file your case until you've had the chance to collect the full fee, because a creditor is about to start garnishing your wages, for example, you can ask the court to pay the fee in payments after filing Chapter 7 in Montana. This gives you the benefit of being protected by the automatic stay as soon as your paperwork is filed with the court. If you are having a hard time setting aside money each pay period to pay the court filing fee even though you are neither getting garnished nor making payments that your Chapter 7 bankruptcy in Montana will eliminate, keep in mind that nothing about that fact will change once your case has been filed. In that situation, it is best to wait with filing bankruptcy in Montana until you have the full fee saved. Otherwise, you risk having your case thrown out if you miss just one installment payment.

If you are not represented by a lawyer when filing bankruptcy in Montana, you have to submit all of your bankruptcy documents to the court in paper. You can do so by either mailing it in, or, better yet, dropping everything off in person. Before you can do that, however, you will have to print everything. If you are filing with Upsolve's help, you will be provided with one single PDF file containing all of the documents. Basically, after hitting print you can walk away and grab a cup of coffee while the printer does all the work. If you filled everything out yourself and have it all saved as separate files on your computer, it's best to print a checklist like this Chapter 7 document checklist prepared by the court to help folks filing a Chapter 7 bankruptcy in Montana make sure they have everything they need. Even though you will only need one full set of your bankruptcy documents when filing Chapter 7 in Montana, it is strongly recommended that you print a full second copy for your own records. That way, you know you have exactly the same information in your version as the information you provided to the court, and can easily refer to it later, if needed.

Go to Court to File Your Forms

As mentioned, even though you can technically file a Chapter 7 bankruptcy in Montana by mailing everything in, it is better to do it in person. That avoids any delay related to mailing the documents and gives you the chance to fix anything that might need fixing while you are at the clerk's office, if possible. Montana's federal bankruptcy district is divided into four divisions, and the county you live in will determine which division your case will be assigned to. Each one of the four divisions has its own courthouse folks filing bankruptcy in Montana can visit. Once you figure out which division you are in, you can find directions to the courthouse directly on its website. If you are not familiar with that part of town, give yourself a little extra time to find parking nearby. Once there, you will have to pass through building security, then make your way to the clerk's office. That is where folks filing a Montana bankruptcy case without a lawyer can submit their bankruptcy forms and pay the filing fee, if needed.

Mail Documents to Your Trustee

A few days after you go to the courthouse to file your Chapter 7 bankruptcy in Montana, you will receive the official notice the court sends to all of your creditors. The name of your trustee, including their contact information, and the date and time set for your 341 meeting will be in this notice. It's important to keep an eye out for this notice as everyone filing Chapter 7 in Montana to submit all documents specified in Local Bankruptcy Form 33 (Mont. LBF 33) to their trustee at least 14 days before their 341 meeting. If you do not do this, the trustee can ask the court to throw out your Montana bankruptcy case. Since you know what documents you will need before your case is filed, it's a good idea to collect everything you will need when you gather your bankruptcy documents at the very beginning of this process. After all, when you're done with filing bankruptcy in Montana, you probably don't want to spend even more time on paperwork.

Take Bankruptcy Course 2

This class on financial management is another one of the requirements Congress added to the Bankruptcy Code in 2005. It is intended to teach folks who are in a Montana bankruptcy case tools for managing their finances responsibly. If you do not complete this course, you will not be eligible for the entry of a discharge order in your Chapter 7 bankruptcy in Montana. There is no hard deadline to take this course, but it makes sense to get this done before your 341 meeting takes place, so you don't accidentally forget later. The course once again has to be taken from a provider approved to offer this course to folks filing bankruptcy in Montana. You can take it either online or over the phone. Once done, it's important to file this certification with the court. This will notify the judge that you are now eligible to have your discharge entered when the appropriate time comes.

Attend Your 341 Meeting

The 341 meeting gets its name from the section of the Bankruptcy Code that mandates it. It's also called a creditors' meeting or the meeting of creditors, though in reality it's mostly a meeting between a person who filed a Chapter 7 bankruptcy in Montana and the trustee that has been assigned to handle their case. The trustee must make sure to verify your identity, so remember to bring two original forms of identification, one of which contains your full social security number. Then the trustee, whose job it is to verify the information you provided to the court when filing bankruptcy in Montana, will put you under oath to ask you questions about your case. At that point, they will have reviewed your official bankruptcy forms as well as the information you submitted to them in preparation for your 341 meeting. Most of these meetings are over in less than 10 minutes with the trustee asking only the standard questions everyone filing Chapter 7 in Montana has to answer, but if there is information in the documents you submitted to the trustee after your case was filed that they need more details on, they may ask you more specific questions as well. Your creditors are invited to attend the meeting and either just observe or use the opportunity to ask you their questions while you are under oath and on the record. That's why it's called the creditors' meeting! Of course, the vast majority of 341 meetings take place without any creditors' making an appearance for any reason.

Dealing with Your Car

There is a lot to be said about life in Montana but that you don't need a car or other vehicle while living there is not one of those things. Naturally, you worry about how your car will be handled if you file a Chapter 7 bankruptcy in Montana. Believe it or not, after filing for bankruptcy protection, it will be your decision how to deal with your car and car loan. Of course, if you own your vehicle free and clear, then nothing changes as long as it is fully covered by one of the available exemptions. If you are still paying on a car loan, however, then filing Chapter 7 in Montana puts you in the driver's seat on what to do with the loan. If everything is great, you like the car, the monthly payment amount works for your budget, and the loan balance and the interest you are paying on it are reasonable, then everything can stay as it was before. All you have to do is enter into a reaffirmation agreement with the creditor that holds the loan, thereby agreeing to continue to be responsible for paying the loan off even after filing Chapter 7 in Montana. If none of that rings true for you, then returning the car is another option. This so-called surrender allows you to walk away without worry, despite the loan, because the bankruptcy discharge protects you.

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Montana Bankruptcy Means Test

So as to make sure that no one who has the ability to pay their debts can abuse the system by filing a Chapter 7 bankruptcy in Montana, everyone who does, must file, along with the rest of their bankruptcy forms, the Montana bankruptcy means test calculation. If your total household income from all sources other than social security is below the applicable income limits, you pass the means test and may file a Chapter 7 bankruptcy in Montana. If you make more than that, your eligibility to file depends on your remaining income, if any, after payment of certain predetermined expenses, as calculated by the Montana means test for bankruptcy.

Data on Median income levels for Montana

Montana Median Income Standards for Means Test for Cases Filed On or After May 1, 2019
Household SizeMonthly IncomeAnnual Income
1$4,324.83$51,898.00
2$5,270.92$63,251.00
3$5,952.25$71,427.00
4$7,909.08$94,909.00
5$8,659.08$103,909.00
6$9,409.08$112,909.00
7$10,159.08$121,909.00
8$10,909.08$130,909.00
9$11,659.08$139,909.00
10$12,409.08$148,909.00

Data on Poverty levels for Montana

Montana Fee Waiver Eligibility for Cases Filed On or After May 1, 2019
Eligible for fee waiver when under 150% the poverty level.
Household SizeState Poverty LevelFee Waiver Limit (150% PL)
1$1,040.83$1,561.25
2$1,409.17$2,113.75
3$1,777.50$2,666.25
4$2,145.83$3,218.75
5$2,514.17$3,771.25
6$2,882.50$4,323.75
7$3,250.83$4,876.25
8$3,619.17$5,428.75
9$3,987.50$5,981.25
10$4,355.83$6,533.75
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Montana Bankruptcy Forms

The Montana Chapter 7 bankruptcy forms are a combination of the official national forms and some local forms created specifically for use within the Montana Bankruptcy District. All of the local forms can be downloaded as Word documents from the court's website. Aside from LBF 33, which is the list of documents you have to send to the trustee before your 341 meeting mentioned earlier, make sure to review and complete Local Forms 36 and 37. The Local Rules require everyone filing a Chapter 7 bankruptcy in Montana to complete and sign these forms in addition the standard bankruptcy forms.

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District of Montana Requirements

The addition of three local forms to the standard filing documents is the most significant requirement under the Montana bankruptcy laws that is unique to this district. Additionally, everyone in a Chapter 7 bankruptcy in Montana must file, within 14 days of filing the initial paperwork, copies of every paycheck stub received in the two calendar months immediately preceding the calendar month your case was filed in. Finally, if the description of your personal property on your Schedule B is not specific enough, you may be required to provide a supplemental listing in the form of Local Form 31.

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Montana Bankruptcy Exemptions

When you file Chapter 7 bankruptcy in Montana you must use the Montana bankruptcy exemptions if you have lived in Big Sky Country for at least two years. Exempt property is protected from your creditors, meaning not even a Chapter 7 trustee can reach it. Even though the Montana bankruptcy exemptions do not have a "wildcard" that can be used for any kind of property like the federal bankruptcy exemptions, your typical household goods and furnishings, including items like jewelry, firearms, and sporting goods are protected up to a combined value of $4,500, as long as each item is worth $600 or less individually.

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Montana Bankruptcy Lawyer Cost

If you are worried about losing a certain item because it does not appear to be exempt under Montana bankruptcy laws, hiring a lawyer may be a good investment. With the cost of a bankruptcy lawyer right around $1,100 to $1,200, the average Chapter 7 bankruptcy in Montana costs slightly less than the current national average.

  • Attorney cost estimate: $1,100 – $1,200

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Montana legal aid organizations, such as the Montana Legal Services Association, assist folks who cannot afford an attorney but need representation. If you don't feel comfortable going through your Chapter 7 bankruptcy in Montana without a legal representative, they may be able to help you.

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Montana Court Locations

Mike Mansfield Federal Building and United States Courthouse
406-782-3354
400 North Main Street Butte, MT 59701

Mike Mansfield Federal Building and United States Courthouse

Russell E. Smith Federal Building
406-542-7260
201 East Broadway Street Missoula, MT 59802

Russell E. Smith Federal Building
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Montana Judges

Montana Bankruptcy Judges
DistrictJudge Name
District of MontanaHon. Benjamin P. Hursh
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Montana Trustees

Montana Trustees
TrusteeContact Info
Christy L. Brandonchristy@brandonlawfirm.com
(406) 837-5445
Darcy M. Crumdcrum@mcn.net
(406) 727-8400
Richard J. Samsonrjs@csjlaw.com
(406) 721-7772
Joseph V. Womackjwomack@jvwlaw.com
(406 )252-7200
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