Montana Bankruptcy Records

Are Bankruptcy Records Public Information in Montana?

Yes, bankruptcy records are public information as stated in the Freedom of Information Act. The FOIA classifies bankruptcy records as public records and guarantees their availability to the general public. The Act also mandates custodians of bankruptcy information to provide them to interested parties for copying or inspection, whether in paper or electronic format.

A clause in the FOIA restricts custodians from making confidential bankruptcy records available to the public. Typically, the court may redact some bankruptcy information, automatically making it unavailable to the general public. Only by court authorization can the redacted information be made available.

Record seekers looking for an alternative to government sources may obtain bankruptcy records from third-party websites. These non-governmental websites often come with tools that help simplify the search for single or multiple records. However, record availability on third-party sites tends to vary because they’re independent of government sources. To obtain bankruptcy case information using third-party sites, record seekers may need to provide:

• A complete name of the debtor involved in the record
• A bankruptcy case number

What are Montana Bankruptcy Records?

Montana bankruptcy records are generated from the documents, cover sheets, and other relevant information regarding bankruptcy cases in the state. These records are the official documentation of proceedings in bankruptcy cases. Typically, these cases occur when a debtor, unable to repay creditors, seeks a way to discharge debts through the provisions of the federal bankruptcy law.

The United States Bankruptcy Court for the District of Montana manages bankruptcy records. The bankruptcy court clerk serves as the custodian of Montana bankruptcy records, and the clerk's office maintains any information gathered during case proceedings. Part of the custodian's duties is disseminating electronic or physical copies of non-confidential bankruptcy information to querying individuals.

Also, government-owned sites maintain bankruptcy information on their databases and provide them to the general public. However, the provision of bankruptcy records is not restricted to government-owned platforms alone, as third-party websites, including staterecords.org, also manage and disseminate such records.

What Do Montana Bankruptcy Records Contain?

The information provided in a Montana bankruptcy record includes filings, court proceedings, court orders, and other bankruptcy-specific or non-specific information. These records are generally maintained by the court and have the following information:

• Bankruptcy case cover sheet
• Case docket
• Claims register
• The involved attorney and trustee's addresses and contact information
• A list of creditors
• Credit report
• A list of the assets owned by debtors
• Financial and income statement of the debtor
• The filing date of the case

Understanding Bankruptcy in Montana?

Bankruptcy in Montana refers to a legal procedure established by federal rules and laws to assist individuals or businesses who are in more debt than they can afford to repay. Bankruptcy allows debtors a fresh start through a court-supervised liquidation of their assets or a reorganization of their financial affairs to work on a payment plan to pay off their debts.

This debt settlement process is handled by Federal Court and cannot be filed in a state court. Hence, debtors may begin the process by filing a petition at the U.S. bankruptcy court in Montana, especially the court location closest to the debtor’s primary residence, primary asset, or business headquarters. Petitions can be filed by married couples, individuals, businesses, or any other entity, in compliance with the Bankruptcy Code.

The debtor has to file a statement with income, liabilities, assets, amount owed, creditors’ names, and addresses alongside the bankruptcy petition. Once the court files the petition, the debtor shall be offered bankruptcy protection in line with federal laws and has to follow the court rules to repay and discharge debts. This may include attending classes, court sessions, meeting with creditors, taking a means test, and following payment plans.

Federal courts maintain records of the entire process involved in filing for bankruptcy. These records are made available to the public unless the records are closed by law or court order.

How to Get Montana Bankruptcy Records?

Obtaining physical copies of Montana bankruptcy records is possible at any of the bankruptcy court's locations. Generally, the court clerk serves as the custodian of bankruptcy records, and interested individuals can request records that they wish to obtain. The clerk's office attends to such requests at the courthouses and also accepts written requests via U.S. mail. The clerk performs record searches at a fee of $32 per search and record reproductions at $0.50 per page.

Alternatively, there are public computers located in each courthouse. These computers provide querying parties with paper copies of bankruptcy records. Requesters may search the court's database via public computers and print out any desired Montana bankruptcy information. A fee of $0.10 per copy printed applies.

To use the public computers or request for records in-person, interested individuals can visit any of the following courthouses during business hours: 8:00 am through 4:00 pm:

U.S. Bankruptcy & District Court, Butte Division
Mike Mansfield Federal Courthouse, 2nd Floor
400 North Main Street
Butte, MT 59701
Phone: (406) 497-1240 (Clerk's Office)

U.S. District Court, Billings Division
James F. Battin Federal Courthouse
2601 2nd Avenue North
Billings, MT 59101
Phone: (406) 247-7000 (Clerk's Office)
Fax: (406) 247-7008 (Clerk's Office)

U.S. District Court, Great Falls Division
Missouri River Federal Courthouse
125 Central Avenue West
Great Falls, MT 59404
Phone: (406) 727-1922 (Clerk's Office)
Fax: (406) 727-7648 (Clerk's Office)

U.S. District Court, Missoula Division
Russell Smith Federal Courthouse
201 East Broadway
Missoula, MT 59802
Phone: (406) 542-7260 (Clerk's Office)
Fax: (406) 542-7272 (Clerk's Office)

Querying parties should note that the courthouses do not permit electronic devices, and they conduct security checks in which all visitors must provide government-issued photo IDs.

To obtain Montana bankruptcy records in an electronic format, the Public Access to Court Electronic Records (PACER) service is available to the public. The PACER database holds federal court records, including bankruptcy records, and individuals who register on the platform can obtain them. PACER is available twenty-four hours a day, seven days a week, to users with an account and an internet connection. Inquiries or concerns about not finding a particular piece of bankruptcy information can be communicated to the service center at (800) 676-6856 or pacer@psc.uscourts.gov.

Where to Conduct a Free Bankruptcy Case Search in Montana

The Montana bankruptcy court also provides records via the Voice Case Information System. Individuals can use the service at no charge and in their preferred languages by calling (866) 222-8029 and following the automated voice instructions to listen to the information they want.

How Do I Find Out if My Bankruptcy Case is Closed in Montana?

Interested individuals can know if a bankruptcy case is closed in Montana by checking the case status on platforms that provide basic bankruptcy information. For instance, the Voice Case Information System, accessible by calling (866) 222-8029), offers basic Montana bankruptcy information, such as if the court has closed a bankruptcy case. The status of a bankruptcy case is also available to users of the PACER system. Likewise, it is available on public computers at the bankruptcy courthouses.

Can a Bankruptcy Be Expunged in Montana

Since Montana bankruptcies are largely non-confidential information and available to the general public, there are no official provisions to expunge a record. However, persons can still file a motion to seal or redact bankruptcy information based on privacy or other reasons. The presiding judge will review the motion and has the authority to grant or deny it. If the judge grants the motion, such information will become inaccessible to the public.

What is the Downside of Filing for Bankruptcy in Montana?

Although bankruptcy provides relief to debtors, there are some downsides to filing for bankruptcy. The major downside to filing for bankruptcy is that it could negatively affect the debtors’ lifestyle for a long time. Some of the common disadvantages include:

• Bankruptcy will be on the debtors' credit report for seven to ten years, depending on the type of bankruptcy filed.
• A recent bankruptcy might reduce the chances of getting a future mortgage or loan.
• Credit card companies almost always cancel credits cards once the debtor files bankruptcy.
• When filing for Chapter 7 bankruptcy, properties not covered under state laws may be lost.
• Tax returns from local, state, and federal governments may be jeopardized or denied due to bankruptcy.
• Bankruptcy might have a negative impact on future employment opportunities.
• Limitation on the number of bankruptcy that a debtor may file within a specific period. For instance, it takes eight years before a debtor can file another Chapter 7 bankruptcy.

Despite these consequences, bankruptcy gives individuals, companies, and other entities the breathing space they need to strategize and pay off their debt. Bankruptcy also eases off some of the debts.

What is Chapter 11 Bankruptcy in Montana?

Also known as reorganization bankruptcy, Chapter 11 bankruptcy is a debt repayment method that allows debtors to restructure debts and generate a payment strategy for their creditors. Often used by corporations because it lets them remain in business, this form of bankruptcy is also available to celebrities, athletes, self-employed individuals, and sole proprietors who are not eligible for relief under other chapters of the bankruptcy code. Only commodity brokers and stockbrokers cannot file under this chapter.

In Chapter 11 bankruptcy, the debtor has to propose a reorganization plan, which is then voted upon by the creditors and confirmed by the court, as long as it meets legal requirements. The reorganization process provides opportunities for debtors to reduce their debts or adjust payment terms like interest rates and amortization period. Furthermore, debtors can remain in possession of assets and keep operating the business while acting as a trustee. The debtor may also borrow money with the court's approval.

However, Chapter 11 bankruptcy is a complicated process and often takes six months to three years to settle debts because of the periodical payments. Records of the entire process are available in the court indefinitely unless removed by law or court order.

Note: Creditors may also file a Chapter 11 bankruptcy in Montana

What is Chapter 7 Bankruptcy in Montana?

Also known as liquidation bankruptcy, Chapter 7 bankruptcy helps to repay and discharge applicable debts through the sales of properties that are not protected under the states’ exemption law. Chapter 7 bankruptcy does not involve reorganization like Chapter 11 bankruptcy but requires the trustee to gather and sell off non-exempt assets to settle secured creditors and other priority debtors. Unsecured creditors (who gave credit without collateral) are settled to an extent, or the court may discharge most unsecured debts owed.

The U.S. Congress imposed an income limit to Chapter 7 bankruptcy to prevent people who can ordinarily afford to pay off their debts from filing for this bankruptcy. Thus, to qualify for this bankruptcy in Montana, the debtor's income must be equal to or less than the states' median income. However, if the debtor's income is above the state's median income, the debtor is required to take a means test to establish eligibility. A means test is an in-depth assessment of a debtor's debt and income in the past six months.

Apart from the income limit and means test, another requirement for the Chapter 7 bankruptcy in Montana is that the debtor has to attend credit counseling within 180 days prior to filing. Debtors can only file a Chapter 7 bankruptcy after taking this counseling course in an approved agency. However, creditors can also file a Chapter 7 bankruptcy in Montana.

Chapter 7 bankruptcy can last up to ten years on a persons’ record, and once filed, it takes about six years or more before the same person is allowed to file for another Chapter 7 bankruptcy. Moreover, the court maintains records of bankruptcy and makes them publicly available unless sealed or removed by court order. Nonetheless, Chapter 7 bankruptcy has a fast process of about four to five months.

What is Chapter 13 Bankruptcy in Montana?

Chapter 13 bankruptcy is also a reorganization bankruptcy for wage earners that involves creating and following a repayment plan based on the debtors' income rather than selling off properties. This repayment plan has to be court-approved and deals with settling debts within three to five years.

Filing under Chapter 13 of the Bankruptcy Code allows individual debtors to keep their properties while making monthly payments to their creditors. It also discharges certain debts, although the process may be complex. Interested persons may choose to file for bankruptcy under Chapter 13 if there are properties that may be liquidated under Chapter 7 bankruptcy. Some of the criteria for filing a Chapter 13 bankruptcy in Montana include:

The filer has secured debts not exceeding $419,275 and unsecured debts not more than $1,257,850

• The filer has income that exceeds the income expectations of Chapter 7
• The filer has not filed for any form of bankruptcy in the last 180 days
• The filer has enough income to cover the payment of priority creditors and unsecured debt within the proposed time frame.
• The filer has filed all tax returns in the last four years.
• The filer attends financial management classes.

Records of a Chapter 13 bankruptcy process are available in the court indefinitely unless removed by law or court order.

What is the Difference Between Chapter 7 and Chapter 13 Bankruptcy in Montana?

Although Chapter 7 and Chapter 13 bankruptcy are both debt repayment options, they differ majorly in their method of payment. Chapter 7 bankruptcy liquidates the debtor’s non-exempt assets and uses the proceeds to settle the debtors' creditors, whereas Chapter 13 deals with developing a repayment plan to repay debts from income within three or five years. As a consequence, debtors stand to lose non-exempt properties under Chapter 7 but may maintain them under Chapter 13 bankruptcy, although the latter takes more time.

Moreover, Chapter 7 is ideal for discharging unsecured non-priority debts, while Chapter 13 is more complex and may not discharge some debts that can be discharged under Chapter 7. Conversely, Chapter 13 allows debtors to reschedule secured debts and also has a special provision that protects co-signers and third parties with consumer debts.

Furthermore, eligibility criteria for Chapter 13 and Chapter 7 bankruptcy differ, and a Chapter 7 bankruptcy case can stay on a person’s credit report for up to ten years, while chapter 13 bankruptcy stays in the report for seven years.

What is Bankruptcy Protection in Montana?

Bankruptcy protection in Montana refers to laws and rules that protect a debtor from collection actions by creditors. Montana's primary form of bankruptcy protection is the automatic stay – an induction that takes effect once the court files the bankruptcy petition. The automatic stay halts collection activities like harassing calls from creditors, collection mails, lawsuits, pending or ongoing foreclosure, property repossession, wage garnishments, and so on. Hence, the debtors have time and space to create a payment plan or prepare for liquidation.

The court shall notify all creditors in a bankruptcy case of the filling status, thereby leveling the playing field and suspending their individual collection rights. Therefore, one creditor cannot claim payment before the other, and all creditors will be dealt with fairly and equally by the court. However, as per Section 362 of the Bankruptcy Code, there are restrictions, limitations, and exemptions to the automatic stay, including:

• Creditors may ask for a lift to the stay and continue actions with the court's approval.
• Debtors cannot use the stay to repossess a property foreclosed before the bankruptcy petition was filed.
• The automatic stay does not stop certain eviction and domestic support actions.
• The automatic stay does not stop tax audits, criminal proceedings, or actions by law enforcement agencies.
• The automatic stay does not stop the cancellation of professional, occupational, or recreational licenses.
• The stay does not halt the payment of domestic support obligations
• Dismissed petitions and repeat filings may limit the duration of the automatic stay to 30 days unless the creditors receive a letter of exemption.

What are Montana Bankruptcy Exemptions?

Montana bankruptcy exemptions are provisions in state laws that govern which properties can be liquidated by the trustee or protected by the debtor, as authorized by the U.S. Bankruptcy Code. Although there are federal rules concerning bankruptcy exemption, Montana has its own rules and requires residents filing for bankruptcy to use these rules instead of federal rules.

These exemptions fall under the following categories:

Motor vehicle exemption: Up to $2,500 of the equity a debtor possesses in a motor vehicle.

Homestead exemption: Up to $250,000 in real property or mobile home with condemnation, insurance, or sale proceeds exempt for 18 months. However, debtors must have recorded a homestead declaration before filing for bankruptcy to qualify for this exemption.

Tools of trade exemption: The state exempts up to $3,000 in trade tools, professional tools, books, and other instruments that aid the debtor's work.

Wage garnishment exemption: A minimum of 75% of debtor’s unpaid weekly wages or 30 times the minimum wage, whichever is higher.

Personal property exemptions: Debtors can exempt up to $4,500 aggregate value of their personal items like home appliances, books, musical instruments, firearms, sports equipment, home furniture, feed and crops, and necessary clothing, with each item costing not more than $600.

The state laws also exempt burial plots, health aids, and up to $500 in cooperative association shares. Proceeds from exempt properties that have been damaged, lost, or sold are also exempt for six months

Pension and retirement exemptions: Montana laws exempt pension plans for public employees, fire-fighters, teachers, police officers, and university system employees. IRA earnings and contributions are also exempt. Debtors may also claim up to 15% of gross annual income or IRAs and ERISA-qualified benefits deposited at least one year before bankruptcy.

Public benefits exemptions:

• Unemployment compensation
• Social Security
• Silicosis benefits
• Local public assistance
• Veterans’ benefits
• Aid to aged, disabled, and families with children who are dependent
• Workers’ benefits
• Compensation to crime victims
• Vocational rehabilitation to the blind
• Subsidized adoption fees

Insurance benefits exemptions:

• Interests in any of the debtor’s unmatured life insurance contracts
• Medical, hospital, or surgical benefits
• Proceeds of life insurance policy, with a clause saying that it should not be paid to creditors
• Benefits, avails, or proceeds from illness or disability insurance
• Hail insurance benefits
• Group life insurance benefits
• Fraternal insurance benefits
• Proceeds of annuity contracts up to $350 per month

Other exemptions

• Property of a business partnership
• Child support and alimony

Note that Montana does not offer wildcard exemption that allows a debtor to protect any property up to a stated amount.

What are the Other Types of Bankruptcy in Montana?

Apart from Chapter 11, 7, and 13 bankruptcies, Montana also offers bankruptcy options under Chapter 9, Chapter 12, and Chapter 15 of the U.S. Bankruptcy Code. Chapter 9 addresses how insolvent municipalities like towns, cities, counties, and villages can deal with debts through reorganization.

On the other hand, Chapter 12 bankruptcy is a bankruptcy option available to eligible family farmers or family fishermen. Debt settlement is also based on reorganization, and debtors have the opportunity to reduce the principal amount, reduce the interest rate, and extend their time for debt repayment. Lastly, Chapter 15 of the Bankruptcy Code provides a guideline for dealing with bankruptcies that involve debtors and creditors across two or more countries.

How Much Does It Cost to File Bankruptcy in Montana?

Depending on the type of bankruptcy being filed, debtors in Montana can expect to pay anywhere from $335 – $1,717 in filing fees. Chapter 7 bankruptcy is the most common form of bankruptcy filed by individuals and requires a fee of $335. Chapter 13 requires a higher fee of $310. However, debtors will also be charged an additional administrative fee and may need to cover attorney’s fees and other court costs.