| Bankruptcy in the United States |
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| Bankruptcy in the United States |
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| Aspects of bankruptcy law |
United States bankruptcy courts arecourts created under Article I of theUnited States Constitution.[1] The current system of bankruptcy courts was created by theUnited States Congress in 1978, effective April 1, 1984.[2] United States bankruptcy courts function as units of thedistrict courts and havesubject-matter jurisdiction overbankruptcy cases. The federal district courts haveoriginal andexclusive jurisdiction over all cases arising under the bankruptcy code, (see28 U.S.C. § 1334(a)), and bankruptcy cases cannot be filed instate court. Each of the 94federal judicial districts handles bankruptcy matters.
Technically, the United States district courts have subject matter jurisdiction over bankruptcy matters (see28 U.S.C. § 1334(a)). However, each such district court may, by order, "refer" bankruptcy matters to the bankruptcy court (see28 U.S.C. § 157(a)). As a practical matter, most district courts have a standing "reference" order to that effect, so that all bankruptcy cases in that district are handled, at least initially, by the bankruptcy court. In unusual circumstances, a district court may in a particular case "withdraw the reference" (i.e., take the case or a particular proceeding within the case away from the bankruptcy court and decide the matter itself) under28 U.S.C. § 157(d).
The overwhelming majority of all proceedings in bankruptcy are held before a United States bankruptcy judge, whose decisions are subject to appeals to the district court. In some judicial circuits, appeals may be taken to aBankruptcy Appellate Panel (BAP). The bankruptcy judges in each judicial district in regular active service constitute a "unit" of the applicableUnited States district court (see28 U.S.C. § 151). The bankruptcy judge is appointed for a renewable term of 14 years by theUnited States Court of Appeals for the circuit in which the applicable district is located (see28 U.S.C. § 152).
TheFederal Rules of Bankruptcy Procedure (FRBP) governprocedure in the U.S. bankruptcy courts.
Decisions of the bankruptcy courts are not collected and published in an officialreporter produced by the government. Instead, thede facto official source for opinions of the bankruptcy courts isWest's Bankruptcy Reporter, published privately byThomson West.
Bankruptcy courts appoint a trustee to represent the interests of the creditors and administer the cases. The U.S. Trustee[3] appoints Chapter 7 trustees for a renewable period of 1 year, Chapter 13 trustees are "standing trustees" who administer cases in a specific geographic region.
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