Montana Bankruptcy Exemptions — What You Keep

Exemptions are the legal rules that determine what property you can keep when you file for bankruptcy. In Montana, exemptions are critically important because they define the line between protected and at-risk assets §70-32-104.

Montana requires use of state exemptions only — federal bankruptcy exemptions under §11 U.S.C. § 522(d) are not available. This means the specific Montana exemption amounts below control what you can protect.

Homestead §70-32-104

Currently $425,828 in equity for 2026 (set at $350,000 in 2021 and indexed up 4% each calendar year, per Department of Revenue). Montana homestead exemption applies to the principal residence. Must file a declaration of homestead with the county clerk and recorder. This protects equity in your primary residence — if your home equity is within this limit, you keep the house in bankruptcy.

Personal property §25-13-609(1)

$7,000 aggregate in household furnishings and goods, appliances, jewelry, wearing apparel, books, firearms and other sporting goods, animals, feed, crops, and musical instruments, with a $1,250 limit per item. This covers household goods, furnishings, clothing, and everyday personal items.

Vehicle §25-13-609(2)

$4,000 in equity in one motor vehicle. This protects equity in your car — meaning the value of the vehicle minus what you owe on it.

Wages §25-13-614

75% of disposable earnings (or amount exceeding 30× federal minimum wage). This applies to wages already earned but not yet paid at the time of filing.

Retirement accounts §25-13-608(1)(e)

Traditional IRAs are exempt to the extent of deductible contributions made before the suit resulting in judgment was filed, plus earnings on those contributions. Roth IRAs are exempt to the extent of qualified contributions made before that suit was filed, plus earnings, and rollover contributions are also exempt. IRA assets are not exempt when the debt is for child support or for maintenance owed to a spouse or former spouse. Benefits from Montana public retirement systems under Title 19, chapters 3, 5 through 9, and 13 are exempt separately under 25-13-608(1)(i), as provided by 19-2-1004. Retirement accounts receive strong protection in bankruptcy — both under state law and federal law §29 U.S.C. § 1056 (ERISA).

Tools of trade §25-13-609(3)

$4,500 in aggregate value in implements, professional books, and tools of the trade. This protects the equipment you need to earn a living.

• In Chapter 7, non-exempt property can be liquidated by the trustee. High exemptions mean you keep more.
• In Chapter 13, the "best interests of creditors" test means your plan must pay unsecured creditors at least what they would have received if non-exempt assets were liquidated in Chapter 7. Higher exemptions can reduce your required plan payment.

• Is your home equity within the homestead limit, or does it exceed the cap?
• Do you have a vehicle loan that reduces your equity below the exemption?
• Are there assets that could be reclassified or converted to exempt form before filing?
• Would waiting to file change the exemption calculation (e.g., recent large deposit, bonus, tax refund)?