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Montana Bankruptcy Laws

Montana Bankruptcy Laws should be known by every resident of the state of Montana. Uninformed decisions can sometimes cost us a lot of trouble. Most individuals immediately turn to bankruptcy protection programs to help them get rid of their mounting credit card bills and delayed monthly mortgages. The same holds true for most citizens of Montana in the brink of facing legal actions from their creditors. Before making the final decision to file for bankruptcy, one should familiarize Montana bankruptcy laws.

The federal and state laws involved in bankruptcy do not aim to discourage debtors from filing for bankruptcy, but instead help them make an informed decision. This is one of the leading reasons why bankruptcy laws require a debtor to undergo a complete credit counseling program six months prior to the application for bankruptcy. The aim of this program is to give each debtor other alternatives to deal with their past due bills. The program also gives debtors training on how to handle their money, how to manage growing debts, and learn to develop a budget. If you pursue the bankruptcy option, the counseling certification will have to be presented together with the necessary paperwork.

One of the foremost things in bankruptcy application is to consider the kind of bankruptcy you are applying for. If you have little assets to lose and you want to have a fresh start, go for Chapter 7. This bankruptcy program will give you this. The court seizes your non-exempt assets, if there are any, and the trustee randomly appointed by the court to your case liquidates it, and the proceeds are distributed to the creditors you owe. As easy as it may sound, the requirements necessary to qualify for Chapter 7 is very meticulous. Regardless if the debtor has so many outstanding bills, as long as his monthly income is more than what the common citizens of the state of Montana are earning he won’t be able to benefit from Chapter 7. This comparison data is based on the latest statistics of the US Census Bureau specific for the said state.

For those who have recently purchased a house or a car, and just accidentally had a mishap or some health problems, a Chapter 13 bankruptcy protection program would be more appropriate. All of your assets will be protected from the creditors because the court will give another chance to pay for all your debts through a debt restructuring program initiated by the trustee assigned to your case. The terms of your existing debts will be restructured in a way that you can adjust to catch-up with the payments. Furthermore, the debtor will be required to present a repayment plan to the courts to be implemented in a 5-year period. During this period, a notice will be given to your creditors to not take any legal action as the debtor will be paying it.

Exemptions are both defined in the federal laws and the Montana bankruptcy laws; however, the latter laws provide more lenient exemptions to give debtors the chance to bring sizeable amount of assets when starting new. The following are some of the exemptions of the state:

• Your home worth $250,000;
• A vehicle worth $2,500;
• 75% of weekly earnings;
• Household goods worth $6,500 including clothing, furniture, and jewelry provided that no single item exceeds the price of $600; and
• Retirement benefits, life and disability insurance, and public assistance and benefits.

The intricacies of bankruptcy laws are complex enough with the help of lawyers; it is much more complex if you don’t hire one. Some things can be done without professional help, but for bankruptcy applications, a lawyer is a necessity.