Montana Bankruptcy Laws

Complete state of Montana bankruptcy exemptions laws which protect a debtor’s property when personal bankruptcy is filed.

70-32-104. Limitation on value.

(1) A homestead may not exceed $250,000 in value. In a proceeding instituted to determine the value of the homestead, the assessed value of the land with included appurtenances, if any, and of the dwelling house as it appears on the last-completed assessment roll preceding the institution of the proceeding is prima facie evidence of the value of the property claimed as a homestead.
(2) If a claimant who is an owner of an undivided interest in real property claims a homestead exemption, the claimant is limited to an exemption amount proportional to the claimant’s undivided interest.

70-32-201. Homestead exempt from execution generally. The homestead is exempt from execution or forced sale, except as in this chapter provided.

70-32-213. Sale proceeds equal to exemption protected. The money paid to the claimant is entitled, for the period of 18 months thereafter, to the same protection against legal process and the voluntary disposition of either spouse which the law gives to the homestead.

25-13-608. Property exempt without limitation — exceptions.

(1) A judgment debtor is entitled to exemption from execution of the following:

(a) professionally prescribed health aids for the judgment debtor or a dependent of the judgment debtor;
(b) benefits the judgment debtor has received or is entitled to receive under federal social security or local public assistance legislation, except as provided in subsection (2);
(c) veterans’ benefits, except as provided in subsection (2);
(d) disability or illness benefits, except as provided in subsection (2);
(e) except as provided in subsection (2), individual retirement accounts, as defined in 26 U.S.C. 408(a), to the extent of deductible contributions made before the suit resulting in judgment was filed and the earnings on those contributions, and Roth individual retirement accounts, as defined in 26 U.S.C. 408A, to the extent of qualified contributions made before the suit resulting in judgment was filed and the earnings on those contributions;
(f) benefits paid or payable for medical, surgical, or hospital care to the extent they are used or will be used to pay for the care;
(g) maintenance and child support;
(h) a burial plot for the judgment debtor and the debtor’s family;
(i) benefits or payments paid or payable from a retirement system or plan within Title 19, chapters 3, 5 through 9, and 13, as provided by 19-2-1004;
(j) benefits or payments paid or payable from a retirement system or plan within Title 19, chapter 20, as provided by 19-20-706; and
(k) the judgment debtor’s interest in any unmatured life insurance contracts owned by the judgment debtor.

(2) Veterans’ and social security legislation benefits based upon remuneration for employment, disability benefits, and assets of individual retirement accounts are not exempt from execution if the debt for which execution is levied is for:

(a) child support; or
(b) maintenance to be paid to a spouse or former spouse.

25-13-609. Personal property exempt subject to value limitations. A judgment debtor is entitled to exemption from execution of the following:

(1) the judgment debtor’s interest, not to exceed $4,500 in aggregate value, to the extent of a value not exceeding $600 in any item of property, in household furnishings and goods, appliances, jewelry, wearing apparel, books, firearms and other sporting goods, animals, feed, crops, and musical instruments;
(2) the judgment debtor’s interest, not to exceed $2,500 in value, in one motor vehicle; and
(3) the judgment debtor’s interest, not to exceed $3,000 in aggregate value, in any implements, professional books, and tools, of the trade of the judgment debtor or a dependent of the judgment debtor.

25-13-614. Earnings of judgment debtor.

(1) Earnings of a judgment debtor that are not subject to garnishment, as provided in this section, are exempt.
(2) Except as provided in subsections (3) and (4), the maximum part of the aggregate disposable earnings of a judgment debtor for any workweek that is subjected to garnishment may not exceed the lesser of:

(a) the amount by which the debtor’s disposable earnings for the week exceed 30 times the federal minimum hourly wage in effect at the time the earnings are payable; or
(b) 25% of the debtor’s disposable earnings for that week.

(3) The restrictions of subsection (2) do not apply in the case of an order or judgment for the maintenance or support of any person, issued by a court of competent jurisdiction or pursuant to an administrative procedure that is established by state law, affords substantial due process, and is subject to judicial review.
(4)

(a) The maximum part of the aggregate disposable earnings of a judgment debtor for any workweek that is subject to garnishment to enforce an order described in subsection (3) may not exceed:

(i) 50% of the judgment debtor’s disposable earnings for that week if the debtor is supporting the debtor’s spouse or dependent child, other than a spouse or child for whom the order is issued; or
(ii) 60% of the judgment debtor’s disposable earnings for that week if the debtor is not supporting a spouse or dependent child described in subsection (4)(a)(i).

(b) However, the amount stated in subsection (4)(a)(i) may be 55% and the amount stated in subsection (4)(a)(ii) may be 65% if the earnings are being garnished to enforce an order for maintenance or support for a period prior to the 12-week period that ends with the beginning of the workweek.

(5) For the purposes of this section, the definitions of earnings, disposable earnings, and garnishment are as set forth in 15 U.S.C. 1672.

19-2-1004. Exemption from taxes and legal process. (Public Employees) Except as provided in 19-2-907 and 19-2-909, the right of a person to any benefit or payment from a retirement system or plan and the money in the system or plan’s pension trust fund is not:

(1) subject to execution, garnishment, attachment, or any other process;
(2) subject to state, county, or municipal taxes except for:

(a) a benefit or annuity received in excess of the amount determined pursuant to 15-30-2110(2)(c); or
(b) a refund of a member’s regular contributions picked up by an employer after June 30, 1985, as provided in 19-3-315, 19-5-402, 19-6-402, 19-7-403, 19-8-502, 19-9-710, or 19-13-601; or

(3) assignable except as specifically provided in this chapter.

19-18-612. Protection of benefits from legal process and taxation — nonassignability. (Firefighters)

(1) Except for execution or withholding for the payment of child support or for the payment of spousal support for a spouse or former spouse who is the custodial parent of the child, payments made or to be made under this chapter are not subject to judgments, garnishment, execution, or other legal process. A person entitled to a pension may not assign the right, and the association and trustees may not recognize any assignment or pay over any sum assigned.
(2) The amount determined pursuant to 15-30-2110(2)(c) of benefits received under this part is exempt from state, county, and municipal taxation.

19-19-504. Protection of benefits from legal process and taxation. (Police Officers)

(1) Except for execution or withholding for the payment of child support or for the payment of spousal support for a spouse or former spouse who is the custodial parent of the child, the benefits provided for in this part are not subject to execution, garnishment, attachment, or the operation of bankruptcy, insolvency, or other process of law and are unassignable except as specifically provided in 19-19-505.
(2) The amount determined pursuant to 15-30-2110(2)(c) of benefits received under this part is exempt from state, county, and municipal taxation.

19-20-706. Exemption from taxation and legal process. (Teachers) Except as provided in 19-20-305 and 19-20-306, the retirement allowances or any other benefits accrued or accruing to any person under the provisions of the retirement system and the accumulated contributions and cash and securities in the various funds of the retirement system are:

(1) exempted from any state, county, or municipal tax of the state of Montana except for:

(a) a retirement allowance received in excess of the amount determined pursuant to 15-30-2110(2)(c); or
(b) a withdrawal paid under 19-20-603 of a member’s contributions picked up by an employer after June 30, 1985, as provided in 19-20-602;

(2) not subject to execution, garnishment, attachment by trustee process or otherwise, in law or equity, or any other process; and
(3) unassignable except as specifically provided in this chapter.

19-21-212. Exemption from taxation, legal process, and assessments. (University System Employees) Except for execution or withholding for the payment of child support or for the payment of spousal support for a spouse or former spouse who is the custodial parent of the child, contracts, benefits, and contributions under the optional retirement program and the earnings on the contributions are:

(1) except for a retirement allowance received in excess of the amount determined pursuant to 15-30-2110(2)(c), exempt from any state, county, or municipal tax;
(2) not subject to execution, garnishment, attachment, or other process;
(3) not covered or assessable by an insurance guaranty association; and
(4) unassignable except as specifically provided in the contracts.

25-13-610. Tracing exempt personal property.

(1) If money or other property exempt under 25-13-608 and 25-13-609 has been sold or has been lost, damaged, or destroyed and the judgment debtor has been indemnified for the property, the debtor is entitled for 6 months to an exemption of proceeds that are traceable, such as in a bank or savings account.
(2) Earnings exempt under 25-13-614 remain exempt for 45 days after receipt by and while in the possession of the judgment debtor in a form into which the exempt earnings are traceable.
(3) Proceeds are traceable under this section by application of the principles of first-in first-out, last-in first-out, or any other reasonable basis for tracing selected by the judgment debtor.

25-13-613. Property necessary to carry out governmental functions.

(1) In addition to the property mentioned in 25-13-609(1), the following property is exempt from all judgment debtors:

(a) all necessary firefighting equipment and facilities of a governmental fire agency organized under Title 7, chapter 33;
(b) all arms, uniforms, and accouterments required by law to be kept by any person and one gun to be selected by the debtor;
(c) all courthouses, jails, public offices, and buildings, lots, grounds, and personal property and the fixtures, furniture, books, papers, and appurtenances belonging and pertaining to the courthouse, jail, and public offices belonging to any county of this state; and
(d) all cemeteries, public squares, parks, and places, public buildings, town halls, public markets, buildings for the use of fire departments and military organizations, and the lots and grounds owned or held by any town or incorporated city or dedicated by a city or town to health, ornament, or public use or for the use of any fire or military company organized under the laws of the state.

(2) The property listed in this section is not exempt from execution issued upon a judgment recovered for its price or upon a judgment of foreclosure of a mortgage lien on the property, and a person who is not a resident of this state is not entitled to these exemptions.

31-2-106. Exempt property — bankruptcy proceeding.
An individual may not exempt from the property of the estate in any bankruptcy proceeding the property specified in 11 U.S.C. 522(d). An individual may exempt from the property of the estate in any bankruptcy proceeding:

(1) that property exempt from execution of judgment as provided in 19-2-1004, 19-18-612, 19-19-504, 19-20-706, 19-21-212, Title 25, chapter 13, part 6, 33-7-522, 33-15-512 through 33-15-514, 39-51-3105, 39-71-743, 39-73-110, 53-2-607, 53-9-129, Title 70, chapter 32, and 80-2-245;
(2) the individual’s right to receive unemployment compensation and unemployment benefits; and
(3) the individual’s right to receive benefits from or interest in a private or governmental retirement, pension, stock bonus, profit-sharing, annuity, or similar plan or contract on account of illness, disability, death, age, or length of service, excluding that portion of contributions made by the individual within 1 year before the filing of the petition in bankruptcy that exceeds 15% of the individual’s gross income for that 1-year period, unless:

(a) the plan or contract was established by or under the auspices of an insider that employed the individual at the time the individual’s rights under the plan or contract arose;
(b) the benefit is paid on account of age or length of service; and
(c) the plan or contract does not qualify under section 401(a), 403(a), 403(b), 408, or 409 of the Internal Revenue Code, 26 U.S.C. 401(a), 403(a), 403(b), 408, or 409.

33-7-522. Benefits not attachable. Money or other benefits, charity, relief, or aid to be paid, provided, or rendered by a society is not liable to attachment, garnishment, or other process and may not be seized, taken, appropriated, or applied by any legal or equitable process or operation of law to pay any debt or liability of a member, a beneficiary, or any other person who may have a right to the benefit, either before or after payment by the society.

33-15-512. Exemption from execution of proceeds of group life — exception.

(1) A policy of group life insurance or the proceeds of the policy payable to the individual insured or to the beneficiary under the policy may not be liable, either before or after payment, to be applied by any legal or equitable process to pay any debt or liability of the insured individual, of the individual’s beneficiary, or of any other person having a right under the policy. The proceeds of the policy, when not made payable to a named beneficiary or to a third person pursuant to a facility-of-payment clause, may not constitute a part of the estate of the individual insured for the payment of the individual’s debts.
(2) This section does not apply to group life insurance issued pursuant to Title 33, chapter 20, parts 10, 11, and 12, to a creditor covering the creditor’s debtors to the extent that the proceeds are applied to payment of the obligation for the purpose of which the insurance was issued.

33-15-514. Exemption from execution of proceeds of annuity contracts — assignability of rights.

(1) The benefits, rights, privileges, and options that under any annuity contract are due or prospectively due the annuitant may not be subject to execution, the annuitant may not be compelled to exercise any rights, powers, or options, and creditors may not be allowed to interfere with or terminate the contract, except:

(a) as to amounts paid for or as premium on any annuity with intent to defraud creditors, with interest, and of which the creditor has given the insurer written notice at its home office prior to the making of the payments to the annuitant out of which the creditor seeks to recover. The notice must specify the amount claimed or the facts that will enable the insurer to ascertain the amount and must set forth the facts that will enable the insurer to ascertain the annuity contract, the annuitant, and the payments sought to be avoided on the ground of fraud.
(b) the total exemption of benefits presently due and payable to any annuitant periodically or at stated times under all annuity contracts under which the person is an annuitant may not at any time exceed $250 a month for the length of time represented by the installments and the periodic payments in excess of $350 a month must be subject to garnishee execution;
(c) if the total benefits presently due and payable to any annuitant under all annuity contracts under which the person is an annuitant at any time exceed payment at the rate of $350 a month, then the court may order the annuitant to pay to a judgment creditor or apply on the judgment, in installments, the portion of the excess benefits that appear to the court to be just and proper, after due regard for the reasonable requirements of the judgment debtor and the debtor’s family, if dependent upon the debtor, as well as any payments required to be made by the annuitant to other creditors under prior court orders.

(2) If the contract provides, the benefits, rights, privileges, or options accruing under the contract to a beneficiary or assignee may not be transferable or subject to commutation, and if the benefits are payable periodically or at stated times, the same exemptions contained in this section for the annuitant apply with respect to the beneficiary or assignee.
(3) An annuity contract within the meaning of this section is any obligation to pay certain sums at stated times during life or lives or for a specified term or terms, issued for a valuable consideration, regardless of whether or not the sums are payable to one or more persons, jointly or otherwise, but does not include payments under life insurance contracts at stated times during life or lives or for a specified term or terms.

33-20-120. Policy settlements — holding proceeds — indebtedness deducted from proceeds.

(1) Any life insurer shall have the power to hold under agreement the proceeds of any policy issued by it, upon such terms and restrictions as to revocation by the policyholder and control by beneficiaries and with such exemptions from the claims of creditors of beneficiaries other than the policyholder as set forth in the policy or as agreed to in writing by the insurer and the policyholder. Upon maturity of a policy, in the event the policyholder has made no such agreement, the insurer shall have the power to hold the proceeds of the policy under an agreement with the beneficiaries. The insurer shall not be required to segregate the funds so held but may hold them as part of its general assets.
(2) In determining the amount due under any life insurance policy heretofore or hereafter issued, deduction may be made of:

(a) any unpaid premiums or installments thereof for the current policy year due under the terms of the policy; and
(b) the amount of principal and accrued interest of any policy loan or other indebtedness against the policy then remaining unpaid.

35-15-404. Share exempt from attachment and execution — sale upon death of member. (Cooperative Associations)

(1) The share, not exceeding the par value of $500, of each member is exempt from seizure on attachment or sale under execution.
(2) Upon a member’s death, the share must be sold by the association and the proceeds, after deducting all liabilities to the association, must be delivered to the deceased member’s heirs.

39-51-3105. Assignment, pledge, or encumbrance of right to benefits void — benefits exempt from levy, execution, attachment, or other remedy for collection of debt — exception. (Unemployment Compensation) Any assignment, pledge, or encumbrance of any right to benefits that are or may become due or payable under this chapter is void, and the rights to benefits are exempt from levy, execution, attachment, or any other remedy provided for the collection of debt. Benefits received by an individual, as long as they are not mingled with other funds of the recipient, are exempt from any remedy for the collection of all debts except as provided in 39-51-2207, 39-51-2208, 39-51-3106, 39-51-3107, and 39-51-3206. Any waiver of an exemption provided for in this section is void.

39-71-743. Assignment or attachment of payments. (Workers’ Compensation)

(1) Payments under this chapter are not assignable, subject to attachment or garnishment, or held liable in any way for debts, except:

(a) as provided in 71-3-1118;
(b) a portion of any lump-sum award or periodic payment to pay a monetary obligation for current or past-due child support, subject to the limitations in subsection (2), whenever the support obligation is established by order of a court of competent jurisdiction or by order rendered in an administrative process authorized by state law;
(c) as provided in 53-2-612 or 53-2-613 for medical benefits paid pursuant to this chapter;
(d) as provided in 39-71-742; or
(e) for workers’ compensation benefits payable to an injured worker to pay restitution to an insurer whenever the injured worker is subject to court-ordered restitution for theft of workers’ compensation benefits. The insurer shall notify the injured worker in writing of the withholding of any court-ordered restitution from the injured worker’s benefits.

(2) Payments under this chapter are subject to assignment, attachment, or garnishment for child support as follows:

(a) for any periodic payment, an amount up to the percentage amount established in the guidelines promulgated by the department of public health and human services pursuant to 40-5-209; or
(b) for any lump-sum award, an amount up to that portion of the award that is necessary to pay current child support and a past-due child support obligation.

(3) After determination that the claim is covered under the Workers’ Compensation Act, the liability for payment of the claim is the responsibility of the appropriate workers’ compensation insurer. Except as provided in 39-71-704(10), a fee or charge is not payable by the injured worker for treatment of injuries sustained if liability is accepted by the insurer.

39-73-110. Assistance not assignable or subject to legal process. (Silicosis Benefits) Except as otherwise provided in this chapter, assistance granted under this chapter is not transferable or assignable, at law or in equity, and none of the money paid or payable under this chapter is subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law.

53-2-607. Assistance not assignable or subject to legal process — exceptions. (Aid to Aged, Disabled Needy Person)

(1) Except as otherwise provided in this title, assistance granted to a needy person under this title is not transferable or assignable at law or in equity and none of the money paid or payable under this title is subject to execution, levy, attachment, garnishment, or other legal process or to the operation of any bankruptcy or insolvency law.
(2) Money paid or payable under this title to a person or entity who is not a needy person but who receives the money for providing goods or services to a needy person is subject to execution, levy, attachment, garnishment, or other legal process.

53-9-129. Award not subject to execution, attachment, garnishment, or assignment — exception. (Crime Victims’ Compensation)

(1) An award is not subject to execution, attachment, garnishment, or other process, except an execution, attachment, or garnishment of a right to compensation for work loss to secure payment of maintenance or child support.
(2) An assignment or agreement to assign a right to compensation in the future is unenforceable except:

(a) an assignment of a right to compensation for work loss to secure payment of maintenance or child support; or
(b) an assignment of a right to compensation to the extent that the benefits are for the cost of products, services, or accommodations necessitated by the injury or death on which the claim is based and are provided or to be provided by the assignee.

80-2-245. Benefits exempt from execution. All money or benefits received from hail insurance are exempt from execution, are not liable to attachment, and may not be seized, taken, or appropriated by any local process to pay any debt or liability of the insured unless the amount is assigned and then for no more than the amount of the claim intended to be secured by the assignment, with lawful interest.

Note: While this reference information is current as of August 2010, it may not reflect the most up-to-date exemption figures on official state of Montana bankruptcy court statutes.

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