Montana residents haven’t had much reason to trust the United States of America of late. From the economic cataclysm affecting every state to the environmental damage suffered through strip mining outrages and similar industrial exploitation of the land, there’s very good reasons why Montana households prefer to consider themselves more than a bit apart from the larger government. Nevertheless, whether because Montana borrowers were forced to rely upon credit accounts to pay for family necessities like food and fuel or whether emergencies suddenly ratcheted up the bills of even the most previously thrifty and self sufficient household, a tragically large percentage of Montanans find themselves behind the eight ball with regards to unsecured debt loads. Continuing this thought, no matter how personally distasteful the suggestion may seem to proud Montana heads of household, all borrowers within our state who have already demonstrated some trouble in satisfying their monthly credit burdens alongside the traditional household bills – and, especially, those borrowers who, after adding up their assembled debts and the amount of money they could reasonably expect to throw at them every month under the most restrictive budgets, could not soberly contemplate a full liquidation of debts within the next five years – should realize they have no realistic choice but to contemplate external assistance for the payback of their debts by whatever means necessary. Again, however ugly the word may sound to residents of Montana, Chapter 7 bankruptcy protection would almost certainly have to be included among the prospective solutions.
Seeing as how most of us never anticipated either the national economy or our household accounts attaining such a state of disorder, Montanans seemingly strove to disregard any specific information about the bankruptcy program, but much of the relevant data likely filtered down through the surrounding culture. For individual borrowers or couples (leaving aside small business owners or family farmers and family fishermen), there are two primary bankruptcy Chapters that could theoretically be of some service. Chapter 13 bankruptcies concentrate upon the payback of loans with an eye to the simplification of payments and a halt to any legal actions such as wage garnishment or home foreclosure that may be ongoing. However, since the credit repercussions of any bankruptcy program are so very dire for the Montana household that decides to go down this road – a notation of bankruptcy will appear on credit reports for up to a decade and prevent borrowers from replacing a vehicle, purchasing a new residence, or, even, with increasing regularity, actual hinder employment opportunities regardless of vocation – we would strenuously consider any Montanan seriously considering some form of help with debt relief to look the other alternatives available besides Chapter 13 bankruptcy no matter how desperate their situation may currently seem unless their home is already in foreclosure or forbearance proceedings. If borrowers in Montana truly wish to risk the drop in FICO scores and dismantling of credit reports that bankruptcy protection inevitably represents, the Chapter 7 debt elimination program simply seems more logical since it will at least erase all of the relevant unsecured debts: letting alone the secured debts (like home mortgages and car loans) as well as those debts, such as unpaid income taxes and student loans, that the government has decided would not be covered by any bankruptcy program.
The federal government has actually been more and more active in limiting the protection available for consumers within Montana and the rest of the United States. Just about four years ago, the president signed into law the Bankruptcy Abuse Prevention and Consumer Protection Act which had a number of insidious consequences for ordinary borrowers even though the legislation was largely ignored by media inside and outside Montana. As just one example, most Montanans are probably already aware that applying for Chapter 7 bankruptcy protection pretty much guarantees that the family in question risks certain assets being considered forfeit to the court for purposes of possible auction to repay all of the creditors whose unsecured debts would be liquidated through bankruptcy discharge. However, as one of the more unfortunate consequences of the BAPCA alterations to the United States Bankruptcy Code, the definition of asset has changed remarkably. Since 2005, borrowers in Montana or the rest of America who attempt debt elimination bankruptcy will have to write down on their petition the estimated cost of replacement of each of their household goods rather than just the resale value – which, for almost anything previously used, isn’t that much at all – and, as a consequence, even ordinary Montana families could find themselves at the mercy of the court trustee. Happily, the Montana legislature has handed down their own exemptions written purely for the borrowers of our state which could be utilized instead of the meager federal alternative, and, in the following section, we will outline a few of those specific exemption which every Montana household mulling over Chapter 7 bankruptcy protection should be well aware of before ever filing the initial paperwork with the Montana county clerk.
Most importantly, for Montana home owners worried about their primary residence (and, for the grand majority of Montanans, their primary family investment), the state exemptions will vouchsafe the homestead as long as the equity of the home after a government appraisal would be less than one hundred thousand dollars which should certainly not affect most ordinary Montanans. Under similar rules, the family motor vehicle should be fine provided that there’s less than twenty five hundred dollars of value once the blue book findings are checked. At least three quarters of the filers’ earnings after taxes will be able to be kept by the household. Tools of trade – which, as should seem obvious, depend greatly on the profession of the Montana borrowers filing for bankruptcy – are protected to the tune of three thousand dollars, and there exists a separate exemption for household possessions (furniture, appliances, clothes, jewelry, family portraits and heirlooms, and the like) to forty five hundred dollars although no specific item itself could be valued at more than six hundred dollars. Burial plots and any associated cemetery property are preserved, no matter the cost, and medical equipment or health aids are set aside so long as they were prescribed by a medical professional or hospital technician. Benefits from retirement, life insurance (un-matured life insurance policies are allowed to four thousand dollars), disability, familial support, veteran’s groups, and most sorts of public assistance (unemployment, social security, workman’s compensation, unemployment insurance) are thoroughly exempted. Additionally, though your authors would hope these need not necessarily apply, a few items especially specific to Montana residents – proceeds from hail insurance and silicosis benefits – will not be subject to bankruptcy seizure.
When examined next to the greatly limited slate of bankruptcy exemptions provided by the United States government, the Montana list should quite rightly be considered more thoughtful and a good deal fairer in the protection of Montana households affected by bankruptcy declaration. Nevertheless, there’s still an extreme degree of risk for even the lower income Montana families who leave their possessions open to the judgment of court officials. After all, should the wife’s wedding ring be valued at more than six hundred dollars by the Montana trustee, it could quickly wind up being sold at auction. Furthermore, even those borrowers who want to balance the odds of debt elimination against asset forfeiture and do attempt Chapter 7 protection may find that they will not be deemed eligible because they make more than the median income of borrowers within their state or, even, because they have filled out the original petition incorrectly. Unfortunately, many of the Montana borrowers only recognize too late the limitations of bankruptcy protection the years following BAPCA, and, after they’ve already ruined their credit rating and spent the money on court documentation and bankruptcy attorneys and the credit management classes now considered mandatory before bankruptcy petitions are accepted and the acceptable debts are discharged, many of the other debt relief alternatives will be rendered unavailable. While bankruptcy may still be of some assistance to a certain type of Montanan family, heads of household should also examine the other forms of debt liquidation such as the new and increasingly popular debt settlement negotiation program. During debt settlement, trained counselors try to force their Montana clients’ lenders to severely reduce the amount of the balances that are owed by offering a swift repayment schedule as well a promise that the clients won’t attempt bankruptcy protection. Effective debt settlement negotiation has none of the negative credit effects that would be seen through bankruptcy, and interested Montana borrowers should be able to learn more about their potential within the debt settlement system for a limited or non-existent fee. There are a number of debt settlement sites now available on the internet which Montana clients have utilized to great success, and, while bankruptcy may still remain the most popular selection for Montana borrowers struggling to free themselves from the shackles of unsecured debt loads, it will take no time at all to see whether or not bankruptcy would still be the best of choices.
The decision to reach out for help with your debt is not one that's easy to make. You were raised to "do the right thing", but now it’s nearly unbearable. You struggle along while your creditors are turning up the heat. And now you’re at the point where the late fees, penalties and interest expense make it impossible to keep your head above water.
Ask yourself this. If you could eliminate your debt without permanently damaging your credit, why wouldn't you?
