Michael v. Martinson (In re Michael)

In this adversary proceeding, the bankruptcy court ruled that Jereld J. and Shirley K. Michael could not claim a homestead exemption because they failed to record a declaration of homestead as required by Montana law before filing their bankruptcy petition. The district court affirmed, and the Michaels appeal. We vacate and remand.

I

When the Michaels filed their voluntary Chapter 7 bankruptcy petition, they had not yet recorded a declaration of homestead as required by Mont.Code Ann. §§ 70-82-105, 106, 107. They also failed to list their home as exempt property on their bankruptcy Schedule…