How to File for Bankruptcy in Montana

Montana is among the lowest in both bankruptcy filing rates and unemployment rates.  That said, there were still 2.71 filings out of every 1,000 residents in 2009.  If that trend continues, many hundreds of Montana residents will be considering whether bankruptcy is the right solution for their financial problems this year, as well.  Their best source of information is a bankruptcy attorney who cannot only help them make the crucial decisions, they can help defend their choices before court officials throughout the process.

Finding a Bankruptcy Attorney

Finding a qualified lawyer who works well with an individual filer is an important step that should entail research on the part of the filer.  They can find recommendations in the state bar association as well as from friends and family members and reliable legal websites.  They should then research each candidate and interview them before making a final decision.

Bankruptcy Options

Deciding which bankruptcy option to choose is governed by new reforms enacted in 2005 guiding those who qualify, especially for Chapter 7.  The means test determines the level of income and assets that are allowed.  However, general guidelines can also help the filer and their lawyer determine the best option:

·         Chapter 13 is for those who have a reasonable amount of income and want to continue to pay off all their debts.  In addition, if this plan is followed through to the end, they will not lose their property to liquidation.  The process includes reorganizing the filer’s assets and debts and formulating a repayment plan that is viable for creditors and debtors.  Once this plan is complete, most debts will either be paid or discharged.

·         Chapter 7 is for those who have few assets and a small income.  Any non-exempt property they do have may be liquidated to pay creditors, but in the end, most unsecured debt may be discharged or erased.

Montana Exemptions

Very few Montana residents choose Chapter 13 bankruptcy, a mere 15%.  The rest can plan to take advantage of the exemptions allowed under state laws to protect certain types of property, as federal exemptions are not allowed.  Those state exemptions include:

Filing the Petition

A debtor is required to attend approved credit counselling classes prior to filing their bankruptcy petition.  Once filed, however, the process may only take two to three months to complete the required steps:

• Working with the bankruptcy trustee to ensure all information is received, all qualifications are met, and all of their requests are satisfied
• Attendance at a 341 meeting called by the trustee at which the filer answers questions about their assets, property, and financial circumstances under oath.  Creditors may attend and ask questions, as well, however they are not required to do so and may still protest any debt discharges that are planned.  The trustee also reviews Chapter 13 plans for viability.
• The filer must attend a debt education class before any debts can be discharged
• When the petition is granted, any eligible debts are discharged.  For the Chapter 13 filer, no debts can be discharged until their repayment plan is complete.