Montana Debt Collection Laws: Garnishment Limits, the New 6-Year Rule, and Repossession

No debt collector in Montana can take money out of your paycheck just by threatening to. Before any wage garnishment for ordinary consumer debt, a creditor must sue you, win a judgment, and get a writ of execution from the court. Most garnishments start with a default judgment entered because the person being sued never answered the complaint, which makes answering the summons the single most valuable thing you can do if you are sued over a debt.

How Wage Garnishment Works in Montana

Montana's wage garnishment cap copies the federal Consumer Credit Protection Act formula. Under MCA 25-13-614, a judgment creditor can reach the lesser of 25% of your disposable earnings for the week, or the amount by which those disposable earnings exceed 30 times the federal minimum hourly wage. At the current $7.25 federal minimum wage, that floor is $217.50 per week: if your weekly disposable earnings are at or below $217.50, nothing can be garnished for ordinary debt.

Disposable earnings means what is left after legally required deductions such as taxes and Social Security. Voluntary deductions like health insurance premiums or 401(k) contributions do not reduce the figure.

Support obligations run on a different track. Court-ordered child support or spousal maintenance can reach 50% of disposable earnings if you support another spouse or child, or 60% if you do not, with each figure rising 5 points (to 55% or 65%) for arrears more than 12 weeks old.

Montana's Department of Revenue collects unpaid state taxes through a levy that runs for 120 days at a time under MCA 15-1-706. The statute directs that the levy be executed in the same manner as execution on a judgment, which points back to the same 25% formula rather than a separate, higher tax percentage. That is worth knowing because some states, including Nebraska, exempt tax debt from their garnishment caps entirely.

Montana law also protects your job: MCA 39-2-302 says no employer may discharge or lay off an employee because of an attachment or garnishment served against the employee's wages. Federal law adds its own protection, though the federal rule only covers garnishment for a single debt.

Bank Accounts and Exempt Property

Montana does not give bank accounts a general dollar-amount exemption. Instead, MCA 25-13-608 exempts specific categories of funds without a dollar limit: Social Security and public assistance, veterans' benefits, disability and illness benefits, individual retirement accounts, medical and health savings accounts, child support payments received, Title 19 retirement system benefits, unmatured life insurance, and a few others. If the money in your account came from one of those sources, it keeps its protection; if it is ordinary wages already deposited, the categories do not cover it.

One important carve-out: subsection (2) of MCA 25-13-608 removes three of these exemptions when the debt being collected is child support or spousal maintenance. Veterans' and social security benefits based upon remuneration for employment, disability benefits, and the assets of individual retirement accounts all lose their protection against a support judgment. The rest of the list, including public assistance, health aids, medical and surgical benefits, child support and maintenance you have received, and medical savings accounts, stays exempt.

Federal law adds an automatic backstop for benefit recipients. When Social Security, VA, or other covered federal benefits arrive by direct deposit, the bank must protect an amount equal to the last two months of deposits from any garnishment order, without you having to claim anything. That protection applies only to direct deposits, not paper checks you deposited yourself.

How Long Can You Be Sued Over a Debt in Montana?

Montana shortened its main debt statute of limitations in 2025. Senate Bill 143 cut the period for written contracts from 8 years to 6, and the current text of MCA 27-2-202 reflects the 6-year rule. Contracts, accounts, or promises not founded on a written instrument carry 5 years. Reports on the bill indicate the change applies prospectively from October 1, 2025, but that transition detail comes from legislative trackers rather than the bill text itself, so anyone with a debt that straddles the change should confirm which period applies to their contract.

Promissory notes have their own rule. Montana recodified its version of the Uniform Commercial Code negotiable-instrument statute at MCA 30-3-122: 6 years after the due date for notes payable at a definite time, or 6 years after demand for demand notes, with an outer 10-year bar if no demand is ever made and no principal or interest is paid.

Whether a credit card account counts as a written contract (6 years) or an account (5 years) is not settled by any Montana case we could identify, so treat the longer period as the safe assumption when deciding whether a debt might still be enforceable.

A statute of limitations that has run does not erase the debt. Collectors may still contact you and ask for payment, and the debt can stay on your credit report for up to 7 years under a separate federal clock. What a collector cannot do is sue or threaten to sue on a time-barred debt; federal Regulation F flatly prohibits it.

Partial Payments Restart the Clock

Montana is a payment-revival state. Under MCA 27-2-409, an acknowledgment of a debt must be in a signed writing to restart the statute of limitations, but a part payment of principal or interest restarts it on its own, no writing required. A small good-faith payment on an old account can hand the collector a brand-new 5 or 6 year window to sue. Before paying anything on an old debt, work out when the clock started and whether it has already run.

Repossession Rules in Montana

Montana enacted the standard self-help repossession rule at MCA 30-9A-609: after default, a secured lender may take the collateral either through the courts or without judicial process, as long as it proceeds without breach of the peace. Breaking into a locked garage or pushing past you when you object crosses the line; taking a car from an open driveway generally does not.

Montana has no general statute requiring a right-to-cure notice before repossession of goods bought on credit. We reviewed the Retail Installment Sales part of the Montana code and found no default-notice or cure section. The one cure-style protection on the books is narrower, and it is a right to reinstate rather than a delay on pickup: MCA 30-19-112 lets rent-to-own (rental-purchase) customers reinstate an agreement within at least 5 days of the renewal date on a monthly payment schedule, or at least 2 days on a semimonthly schedule. If the property has already gone back to the lessor, the customer still has at least 21 days after the return to reinstate, or at least 45 days if two-thirds of the payments toward ownership have been made. Subsection (6) is the part people misread: it expressly says the section does not prevent a lessor from attempting to repossess the property during the reinstatement period, so the window protects the right to get the agreement back, not possession of the goods in the meantime.

After repossession, any sale of the collateral must be commercially reasonable in its method, manner, time, place, and terms under MCA 30-9A-610. If you are a servicemember and the loan predates your military service, federal law requires a court order before repossession.

If You Are Being Garnished or Sued in Montana

Start with the paperwork. If you were served with a summons, answer it before the deadline, even with a simple denial; a default judgment gives the creditor everything and skips any review of the debt. If a garnishment has already started, check the math against the 25% formula, and claim exempt income categories under MCA 25-13-608 with the court if protected funds are being taken. If the debt is old, do not make a payment before checking the statute of limitations, because payment restarts it. When judgments and garnishments have stacked beyond what a budget can absorb, bankruptcy's automatic stay stops garnishment while the case is pending, and a structured guide to stopping wage garnishment walks through the options in order.

Information last verified on 2026-08-12. This article has not yet been reviewed by a licensed lawyer.

Related Resources

• Debt Collection Laws by State
• Statute of Limitations on Debt
• How to Stop Wage Garnishment
• Car Repossession Laws
• Montana Statute of Limitations
• Montana Bankruptcy

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Last updated: 2026-08-12.

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