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A Quick Look Into Bankruptcy Court Jurisdictions

A Quick Look Into Bankruptcy Court Jurisdictions

With so many bankruptcy court cases facing
our country annually, there must be organs of the
Federal judiciary to which this responsibility can be more
evenly distributed. Indeed, for every state, United States territory, and even
the District of Columbia, there are bankruptcy


Including the court specifically representing
the District of Columbia, there are twelve district court circuits composed of
94 separate districts that preside over bankruptcy court cases in America. The
eleven numbered circuits into which the fifty states are fit are organized
based on geographic proximity. For
example, the Second Circuit is comprised of Connecticut,
New York, and Vermont, and the Eighth Circuit is made up of Arkansas, Iowa,
Minnesota, Missouri, Nebraska, North Dakota
, and South Dakota. Regarding overseas U.S. territories,
meanwhile, Puerto Rico is assigned to the First Circuit, the Virgin Islands to
the Third Circuit, and Guam and the Northern Mariana Islands to the Ninth


Just looking at how these
geographically-oriented districts are organized, it is clear that the circuits
with oversight over all bankruptcy court cases in its region are not
exactly evenly distributed. Going back to the examples of the Second and Eight
Circuits, the former has but three states under its domain, but the latter has
governance of a full seven. The disparity is yet larger between the D.C.
Circuit, which does not even represent a whole state, and the Ninth Circuit,
which includes nine states and two territories.


Each court has its own bankruptcy court
records, which makes them hard to review at large and at length. However,
efforts are still made by certain organizations to compile more comprehensive
analyses of these bankruptcy court records.


The official service of the Federal judiciary that is tasked with the assembly of
known bankruptcy court records is the Public Access to Court Electronic
Records system
(PACER). PACER’s mission is to provide public access (for a fee)
to case and docket information for all hearings in
Federal courts, including bankruptcy court cases. In
addition, West’s Bankruptcy Reporter independently puts
together volumes of bankruptcy court records, also with cost.

What to Know About Limited Formal Proceedings

What to Know About Limited Formal Proceedings

Bankruptcy court is a subset of the Federal judiciary, following explicit bankruptcy court rules, and
as such
proceedings within are legally binding. Bankruptcy court is certainly no joke. Moreover, appearances before the court do not happen for free. With bankruptcy
court filings, unless more extreme circumstances present themselves, there are
fees attached to both the filing of the case and its administration.


The pressures and constraints behind
bankruptcy court may indeed be quite worrisome to debtors. That said, there is
the potential for a considerable amount of informality in the officiation
of bankruptcy court rules with specific regard to how concerned parties
are given notice of the proceedings, how creditors submit their claims, and
whether or not bankruptcy court filings must be made at all.


The following are considerations on how
the bankruptcy court rules may be bent, if only slightly:


It stands to reason that bankruptcy
court filings must come from all parties directly affected by the matters at
hand in the case. This implies that creditors have their own motions and
documents to file. Most importantly, for lenders to be considered as
beneficiaries of official bankruptcy cases, they must submit a proof of claim
with the designated bankruptcy court.


There are specific bankruptcy court rules
that govern bankruptcy court filings themselves. However, even when
creditors are negligent of this information, a judge may deem an “informal
proof of claim” acceptable if it is put in writing, holds the debtor to a
financial obligation, and is fair to all involved.


While bankruptcy court rules for the
most part are established by the
Federal justice system, the latitude of proofs of claim are an indication
the court’s discretion in these matters, which may prompt some debtors who feel they were
treated egregiously to appeal their decision. Another discretionary ruling may
be applied to the receipt of notice that proceedings are, in fact, to happen.
Despite the absence of notices to creditors, even informal statements from
debtors that bankruptcy court filings have already been made must be investigated
by the court to see if they (the debtors) should be protected by 
automatic stay.         


Especially in the case of
businesses, bankruptcy court filings may indeed be too
costly for debtors, and the debtors may indeed be insolvent,
but they may
not have enough money to provide settlements to
, or may otherwise find formal bankruptcy proceedings unappealing.
In this context, some debtors may choose to move forward with private
settlements. For both creditors and debtors, though, this is a risky prospect.
As these engagements are not subject to normal bankruptcy court rules,
there is the risk of misinformation or criminal misrepresentation, and what’s
more, this may be more difficult to prove in a court of appeals. 

Know the Goal of Bankruptcy Laws

Know the Goal of Bankruptcy Laws

Those who have never had any encounters with
bankruptcy law may assume that the courts are predisposed to act in the
interests of creditors
, and thus, are against debtors. However, this is not the case.
After all, the very fact that bankruptcy laws exist in the United
States are emblematic of the fact that the government is not interested in
feeding insolvent parties to the lions, in a manner of speaking.


Courts of bankruptcy law, in theory, are
designed to be balanced in representing all sides in proceedings, and whether a
judge’s discretion significantly impairs this balance is up to judgment in
and of itself. Some notes on bankruptcy courts’ stated goals
with regard to bankruptcy laws in the United States:


Keeping with the theme of bankruptcy
law as an emblem, American bankruptcy laws are perhaps the
perfect example of a “second chance” as far as the law in this
country goes. As of result of proceedings in a bankruptcy court, everyday
people may be allowed to wipe their debts away for good, getting them out of a
situation that otherwise would
have had
them struggling to stay afloat for years more or just would not have been
possible to manage by virtue of the numbers game.


As students of bankruptcy
law understand, there are several specific chapters of the Bankruptcy
. Bankruptcy laws have not just been
written to protect average Americans, though. However, especially when the
failures of companies may affect tens, hundreds, and thousands of people, the
idea that corporations
may also apply for assistance in overcoming insolvency
is paramount. Courts of bankruptcy law extend the same choices of
liquidation and reorganization to businesses facing failure.


As noted, bankruptcy laws are supposed to
work in the best interests of all with an interest in th
e case. This includes creditors who may not be able to get
100% back on their investments, but may still recoup a satisfactory amount of
what they were legally owed. Through the workings of bankruptcy law, creditors
with valid claims may be able to get a portion of what they are entitled to in
regular installments from debtors through the officers of the court.


Then again, the United States is obviously
not the only maker of bankruptcy laws in the world, as such a fate may
befall anyone in any land.
In such instances, Chapter 15 of the Bankruptcy Code comes into play.

Facts to Know About Meeting of the Creditors

Facts to Know About Meeting of the Creditors

As discharging and reorganizing debts is the whole point of bankruptcy, creditors must be kept informed at all stages of bankruptcy proceedings, as they most definitely have an interest in the case.
After being served with initial notice of the debtor filing for bankruptcy, creditors will gain notice of the formation of a bankruptcy plan through a preliminary court proceeding known as a meeting of the creditors or creditors’ meeting. Certainly, a meeting of the bankruptcy creditors is less formal than adversary proceedings in bankruptcy, and depending on the circumstances of the case, the whole operation may take a relatively short time. 
That said, for the individual debtor, a creditors’ meeting is an inescapable fact of the process. Moreover, though the debtor may not be accused of a crime within a meeting of the creditors, he or she must be prepared to defend his or her case. The following are some notes about the importance of a creditors’ meeting in bankruptcy court:
Compared with other stages in a debtor’s request for relief through bankruptcy, creditors play a decidedly large role in impacting the outcome of a case. Meetings of the creditors, as held in court, are conducted with due alacrity after the initial petition is submitted by the debtor. 
Depending on the chapter under which one files for bankruptcy, the exact deadlines for holding a creditors’ meeting may vary, but barring extensions, it should take place sometime between 20 and 35, 40 or 50 days after receipt of the petition, as specified by the Federal Bankruptcy Rules of Procedure. 
As opposed to the confirmation hearing that puts a rubber stamp on the debtor’s confirmation plan, a first meeting of the bankruptcy creditors is directed not by a bankruptcy court judge, but by an official U.S. trustee or credible representative thereof. 
Within the creditors’ meeting, alongside serving essentially as the referee of the proceeding, the appointed trustee must ask pointed questions of the debtor, primarily to gauge their understanding of their rights and responsibilities in these matters, as well as to assure that all assets and documentation is accounted for. 
Meanwhile, pursuant to their best interests in bankruptcy, creditors will direct their own questions, comments and reservations at the debtor. Particularly in Chapter 13 cases, where properties are being reorganized as opposed to being liquidated, creditors will want to know they are getting the same value they would otherwise get if a Chapter 7 case were processed. 
In certain more rare cases, the meeting of the creditors will not have the same resonance. For instance, in a Chapter 9 municipality reorganization, the role of the bankruptcy court will be much diminished, and with so many potential creditors, there will not be a formal creditors’ meeting. The only scenarios under which creditors may convene is a creditors’ committee, and even then, their statute is limited. 

Consider Automatic Stay Before Filing for Bankruptcy

Consider Automatic Stay Before Filing for Bankruptcy

For most if not all people, bankruptcy should
be a measure of last resort. The financial costs of filing for bankruptcy and
the stain it can leave on one’s credit history are among the important concerns
that face the prospective petitioner.
A rather valuable aspect of an automatic stay is that it takes effect right after the debtor files a
for bankruptcy. In fact,
the bankruptcy court with jurisdiction over a particular case will not even
require that a separate hearing be held for the judge to recognize a bankruptcy
stay order.


Upon receiving formal notice, though, it is
creditors who must take care to recognize the authority of an automatic stay,
as it mandates that they may not make any more demands of the debtor of a financial
nature. This includes
making persistent calls, as
well as court-ordered wage garnishment and civil lawsuits filed by the creditor
to try to collect on its loan(s).


Thus, the inherent value of a bankruptcy
stay to the debtor is that it works quick
ly and, especially in incidences of reorganization
plans, gives individuals and businesses a chance to formulate their plans with
less distraction and more peace of mind than they otherwise would have.


Nonetheless, the protections
of automatic stay have their limits. For one, while it may prevent
lenders from filing suits to try to get money back on their investments, in the
event the debtor commits fraud or some other kind of crime, they still stand to
be litigated against in adversary proceedings
. In addition, automatic stay does not
necessarily apply to all debts, meaning that certain collection actions may
continue even though others have stopped. 

Understand the Bankruptcy Court Governance

Understand the Bankruptcy Court Governance

Though there may be a Supreme Court, there is
no one United States bankruptcy court to hear individual bankruptcy cases.
The demand would simply be too large on that one court. However, there is a
Federal bankruptcy court system.


The Federal bankruptcy court system is the usual
destination for bankruptcy cases, and upon a decision reached by a bankruptcy,
barring an appeal, this finding will be final. However, the United States
bankruptcy court system is only a part of the U.S District Courts. After a
petition is filed with a bankruptcy court, the District Court of a particular
jurisdiction may always choose to waive its right to refer proceedings to that
court, and instead hear the case itself. Depending on the district, though, the
district court may refer cases to the bankruptcy court by virtue of standard
practice, so any friction between agencies in this hierarchy is effectively


Much as the U.S. District Courts must
delegate the right to the bankruptcy courts to actually hear individual cases,
Federal bankruptcy court system is
subject to a codified set of rules established by a higher authority
: the Federal Rules of Bankruptcy Procedure,
which are an appendix to the Bankruptcy Code


A given United States bankruptcy
court is helmed by an official bankruptcy judge, but a number of other
officers of the court will be involved in the application process and any
subsequent hearings. Usually, a court of clerk will refer a case to a
particular arm of the 
bankruptcy court system, and the U.S. trustee will appoint a trustee

to assist with the case.

Role of Trustees

Role of Trustees

While the role and authority of a bankruptcy court judge is critical to the carrying out of bankruptcy litigation, the judge cannot do everything on his or her own. Filing for bankruptcy is a multi-step process, necessitating initial approval by the court to hear the case, the formation of a liquidation or rehabilitation plan to appease creditors’ claims, and its formal confirmation in accordance with the law. Consequently, another officer of the court is needed to mediate these proceedings. Such is the charge of the bankruptcy trustee, also known as a trustee in bankruptcy.
The U.S. Trustee Program was established along with modern bankruptcy courts as part of the Bankruptcy Reform Act of 1978. The extent to which a bankruptcy trustee will be called upon to provide “hands-on” administration of a case will vary based on the type of petition filed.
The specific requirements of a bankruptcy trustee are too numerous to mention, but speaking in more general terms there are a number of duties asked of trustees/administrators over the course of a case. Among the potential procedural elements to be carried out by a trustee in bankruptcy include the temporary ownership and administration of the debtor’s assets and interests, also known as a “bankruptcy estate,” leading meetings of creditors, dispersing funds to creditors as per the parameters of a confirmed plan, and responding to allegations of abuse and fraud in bankruptcy cases giving way to adversary proceedings.         
Oftentimes, though, a bankruptcy trustee working for the U.S. Federal Government will not be directly involved with administration of a bankruptcy estate. Instead, a separate, private trustee in bankruptcy will be their surrogate, so to speak. Specifically, private trustees are used in Chapter 7, 11, 12, and 13 cases, although the Executive Office of the U.S. Trustee may be requested to be a party to these matters in the event a private administrator cannot or will not. Either way, though, the U.S. Trustee must appoint these private trustees in bankruptcy for this very cause.

Federal Rules of Bankruptcy Procedure

Federal Rules of Bankruptcy Procedure

In the United States, bankruptcy court is in
the domain of the
Federal Government. In order for there to be some degree of
consistency across America for individual bankruptcy courts in

94 Federal districts, certain uniform bankruptcy court rules
must govern how proceedings are run. For example, the nation’s appellate courts
are guided in part by the Federal Rules of Appellate Procedure

. Both the Court of Appeals and the United
States bankruptcy court system, meanwhile, are influenced by the
provisions outlined in the Federal Rules of Bankruptcy Procedure



Like the FRAP, the bankruptcy court
rules outlined by the FRBP are handed down to bankruptcy courts by the
Supreme Court. Imaginably, they are policies unto themselves that pertain
specifically to bankruptcy in America. The following are considerations of the
Federal Rules of Bankruptcy Procedure’s structure and their role in the United
States bankruptcy court system:


The FRBP are rather expansive, considering all that is contained within the individual
chapters of Title 11 of the United States Code. After all,
these bankruptcy court rules exist
as an appendix to the more specific bankruptcy court
rules of the Bankruptcy Code


The beginnings of the Federal Rules of
Bankruptcy Procedure as applicable in the United States bankruptcy court
program can be traced back to the 1930s in the passage of the Rules Enabling
(REA) that conferred policymaking powers on the Supreme Court and has been responsible
for the continued change of similar codified court guidelines
, such as the Federal Rules of Criminal Procedure. Section
2075 of the REA in particular grants the Supreme Court the “power to
prescribe by general rules, the forms of process, writs, pleadings, and
motions, and the practice and procedure in cases under title 11.” 


In terms of how the Federal Rules of
Bankruptcy Procedure are practically implemented in the United States
bankruptcy court system today, the FRBP covers a lot of territory with
regard to bankruptcy court rules. Part I refers to details surrounding the
start of proceedings and how they may differ for voluntary and involuntary
petitions. Part II approaches policies on the officers of the court and
pre-trial meetings (e.g. meetings of the creditors). Part III involves
discussion of creditors’ claims and the development of repayment


In Depth Overview of Bankruptcy Court

In Depth Overview of Bankruptcy Court

As opposed to other subsets of the law, such as the juvenile justice system which sees sizable variations from jurisdiction to jurisdiction based on the fact juvenile detention works as locally as the county level; the United States Government must have a stronger hand in regulating other matters like bankruptcy. This is especially so given that the subject is so closely tied to people's financial situations. As such, bankruptcy court is wholly a byproduct of the Federal judiciary.

This does not imply that each state does not have its own representative court, however. Throughout America's Federal districts extending even to its territories in the Atlantic and Pacific, the U.S. Bankruptcy Court system permits debtors and creditors to have their day in court, literally and figuratively. Contact bankruptcy lawyers for legal advice and assistance.


The importance of bankruptcy courts in America is hard to deny considering over a million petitions are received by the United States Court system as a whole each year. In terms of its origin, the provision giving the Federal Government power to make nationwide laws on the subject has been around since our beginnings as an independent country.

Article I of the Constitution confers these abilities on Congress. However, in that given clause, it says nothing about the creation of a separate court to hear matters of insolvency. It would be the Bankruptcy Act of 1898, essentially the first major piece of legislation in American history, that would bring the Bankruptcy Courts into being.

The breadth of bankruptcy court in the United States is rather considerable. Geographically, each Federal District contains a bankruptcy court, including the District of Columbia, the Virgin Islands, the Northern Mariana Islands, Guam, and Puerto Rico. The Federal courts have exclusive domain over the filing and processing of bankruptcy cases in America, thereby expressly ruling out the states from deciding the financial fates of their constituents. 

There is no one "supreme" bankruptcy court, as each District is designed so that it will have a certain degree of autonomy to manage affairs within its own boundaries. All the same, there is still a hierarchy when it comes to these "Federal courts."

Although, as noted, the bankruptcy courts are usually the ones given standing reference to rule on the circumstances of individual people, families and businesses, when it comes down to brass tax, as they say, the U.S. District Courts have ultimate oversight of the bankruptcy cases.

There are hierarchies and officers within bankruptcy courts themselves, too. As is the norm for court proceedings, bankruptcy court is subject to the findings of presiding judges. Working in concert with these heads of the court are, in most cases, trustees who essentially act as a liaison between debtors and creditors, and the clerks of court that help assign the case. Nonetheless, they too are bound by a specific code.

Through an appendix of Title 11 of the United States Code outlined and amended by the Supreme Court, the Federal Rules of Bankruptcy Procedure dictate how courts and those within should comport themselves, as well as Title 11 itself regarding variations based on the specific intent of the applying debtor.


Though bankruptcy filings do not come evenly to all parts of the country, there are still institutions in place that can hear petitions no matter where someone lives. Overseeing the 94 districts into which the United States is divided are 12 circuits that, for the most part, are organized with respect to closeness. As for overseas territories, which, as noted, are included for consideration by bankruptcy courts, Puerto Rico is a member of the First Circuit along with Maine, New Hampshire, Rhode Island, and Vermont.

The Virgin Islands are included with Delaware, New Jersey, and Pennsylvania in the Third Circuit. Guam and the Northern Mariana Islands are part of the Ninth Circuit along with a host of states. It should be noted that the District of Columbia receives its own bankruptcy court.

As the above breakdowns of individual circuits indicate, the sizes of these different circuits may vary greatly. They may be as small as the District of Columbia, or as large as the Ninth Circuit, which includes eleven subdivisions between states and territories. Certainly, though, this is explicable by virtue of differing population densities across the nation and disparities of land areas among different states.

The records of these courts are also subject to the officiating of these individuals and circuits. It is thus the task of entities like the Public Access to Court Electronics Records (PACER) system (affiliated with the Federal judiciary and funded by public use) and devices like West's Bankruptcy Reporter to compile this information.

Limited Formal Proceedings

While bankruptcy proceedings are not a laughing matter, it also may not always be subject to the same strictness that is inherent in criminal court. This may work to the advantage of both debtors and creditors depending on the circumstances.

Quite generally, courts may be more lenient with debtors depending on the judge's views of the case, although they (the debtors) should be expected to cooperate fully with trustees and creditors, when applicable. Then again, provisions like automatic stay – which may be granted without first notifying lenders – are quite substantial benefits to people who are unable to meet their financial obligations. As for the creditors, they may not even have to file their claims to monies owed to them by the books and may request for bankruptcy proceedings to begin for their own collection purposes.

Debtors and creditors may be able to avoid formal court proceedings altogether, which may be costly in their own right. Especially concerning corporate debtors with a number of interested lenders and shareholders, companies may enter into private agreements with these parties to release them of their monetary requirements.

Seeing as these affairs are not protected by the conventions of Federal court, they contain a certain element of risk, even though they may be more convenient and expedient than going through a series of hearings in bankruptcy court. Moreover, if something does go awry, the courts will have limited ability to remedy the situation.

Goal of Bankruptcy Laws

In theory, bankruptcy laws and bankruptcy courts are meant to benefit the parties that request their services without causing hardship for the other parties. The majority of petitions are submitted by the debtors themselves (and with some bankruptcy forms may, in fact, only be requested by the insolvent party), and thus, realistically the courts are very debtor-oriented.

Especially concerning liquidation proceedings that will result in a net loss of assets, perhaps even one's home, the workings of bankruptcy law will be a means of starting over, even if that is not wholly desired by the individual debtor, and despite the mark that will be left on one's credit.

Again, both the designs of other parties directly involved in the case and those who are more ancillary to the proceedings but still possess a stake in the outcome are to be considered.

In all cases, creditors are to be represented in terms of their legitimate claims for monies owed to them based on a previous contract with their debtors. Businesses may also petition for bankruptcy relief, both domestically (i.e. Chapter 7 and Chapter 11) and across international lines (i.e. Chapter 15).

Adversary Proceedings

When differences between debtors and creditors cannot be resolved by the normal proceedings of bankruptcy court, or one party does not act fairly according to State and Federal statutes on bankruptcy, adversary proceedings are a natural result. Solicited by one proverbial side of the equation through the means of a formal complaint, an adversary proceeding is similar to most civil court operations, with a plaintiff, defendant, judge, and, on request, a trial by jury.

Oftentimes, these proceedings will manifest as a result of the appearance of fraud or abuse. Either the accused will have obscured the true nature of their assets (i.e. what they are, who owns them) or will have falsified court documentation to deliberately deceive creditors and bankruptcy court officials.

Through adversary proceedings, almost all stages of the bankruptcy relief process may be contested. For one, the debt repayment plan, the big symbol of one's attempt to get out of debt, is subject to review upon allegations of fraudulent activity. So too can discharge of debts be objected to for similar reasons, or simply with the idea that the debtor may wish to have some debts discharged that are legally incapable of inclusion in this category.

Debtors and creditors may even seek judgments to see where they stand on the issue beforehand and after. In short, there are a lot of potential uses for adversary proceedings for debtors and creditors alike.

Meeting of the Creditors

Commensurate with the idea creditors must stay informed at all points in bankruptcy court proceedings, they must be served notice in the event of formation of a bankruptcy plan that would have them as claimants.

In a meeting of the creditors, the namesake party, the representative of the trustee and the debtor all convene in a suitable forum for hearing questions on the workings of the bankruptcy plan if it were to be implemented. Both the appointed trustee and the creditors will have their opportunity to ask questions, but with the latter party, it is decidedly more likely that they will raise them in somewhat of a contrary manner. 

Automatic Stay

In a perfect world, no one would have to declare bankruptcy. In the real world, however, millions of people file for bankruptcy each year in the United States alone. To be sure, there are compelling reasons for and against this course of action, but as the facts of the case allow, one of the greatest incentives for submitting an application is to put a stop, albeit temporarily, to creditors' demands.

This is made possible by the doctrine of automatic stay, which does not even require a court hearing to take effect. Though short in duration, this near-complete order might be just the ticket for the debtor who is not looking to sell his or her possessions.

An automatic stay is not without its limitations, though. As noted, automatic stay does not afford the debtor freedom from creditors throughout the rest of his or her life and does not apply to exceptions to the rule specified in the Bankruptcy Code. Nonetheless, an automatic stay has some other functions. It allows individuals and corporations a period to try to reform and become better debt managers. Moreover, especially for corporations, they may use this time to try institute a more competitive business rate than their competition.

Role of Bankruptcy Judges

Bankruptcy court judges, appointed to 14-year terms in Federal bankruptcy courts by the U.S. Court of Appeals system, do more than serve as a figurehead nominally holding their posts in these affairs. On the contrary, bankruptcy judges, like bankruptcy attorneys, must possess an intimate knowledge of bankruptcy law.

The decisions of the bankruptcy judge will be of utmost important to a debtor's case for relief, especially if those decisions involve a refusal to hear the case itself or its dismissal. These determinations are not simply arbitrary, but are based on the Federal Rules of Bankruptcy Procedure and the individual procedural rules set by that court.

Working hand in hand with a representative of the U.S. Trustee, a bankruptcy court judge will also be involved significantly with discussion and confirmation of a plan. At the very least, a reorganization or liquidation plan must serve the initial stated purpose of the debtor in applying for bankruptcy and must be fair to all creditors and interested parties and clear their objections, or else risk dismissal by the judge.

Then again, a bankruptcy judge does not work only to serve the creditor and restrict the debtor. As much as the veracity of a voluntary petition must be proved, bankruptcy judges must also respond to the viability of lenders' claims and any motions filed by attorneys during proceedings.

Role of Trustees

Not to discount the role of bankruptcy court judges, but these professionals in themselves cannot handle/oversee the totality of bankruptcy litigation proceedings. A necessary officer in the administration of a bankruptcy case is that of the assigned trustee in bankruptcy.

District bankruptcy trustees represent 21 organized geographic regions in the United States and are appointed specifically by the U.S. Attorney General. Sometimes trustees are a non-factor in bankruptcy proceedings, as in Alabama and North Carolina which are under the domain of "bankruptcy administrators" or as in Chapter 11.

Among these specific tasks of trustees and bankruptcy administrators are holding creditors' meetings and asking pointed questions therein alongside concerned creditors regarding a repayment plan, distributing agreed-upon monies subsequent to confirmation of said plan, and probing charges that a bankruptcy appeal was made in bad faith and/or that creditors and court officials were illegally misinformed.

It should be acknowledged at this juncture that the executive officer of the U.S. Trustee for a given region will not hear every case himself or herself; the demand is simply too high. That said, regional trustees working for the government may yet appoint private trustees in bankruptcy to administer cases of personal and corporate bankruptcy in Chapter 7, 11, 12 and 13 bankruptcy cases.

Bankruptcy Appellate Panel

Following a ruling in bankruptcy court contested by the debtor, in some Federal districts, the next immediate step is to file a motion for appeal to a bankruptcy appellate panel (BAP). Bankruptcy appellate panels have been on the books ever since the Bankruptcy Reform Act of 1978.

Bankruptcy appellate panels are headed by a trio of bankruptcy judges who serve their circuits as a whole with their opinions. The panels and the officials that oversee appeals from the bankruptcy court are also influenced by the rulings of a higher court.

As part of the Supreme Court's Federal Rules series, the Federal Rules of Bankruptcy Procedure and Federal Rules of Appellate Procedure are both applicable to reach this branch of the Court of Appeals. This assumes that a BAP is even requested to weigh in on these affairs. The general district court may be asked to render a verdict and/or refer the case to the head Court of Appeals for the entire circuit. 

Federal Rules of Bankruptcy Procedure

In an effort to ensure uniformity from court to court with regard to bankruptcy proceedings in the United States, the Federal Rules of Bankruptcy Procedure are authorized and modified now and again by the Supreme Court, which first gained this privilege as a result of the language of Congress's Rules Enabling Act. In Section 2075, the Supreme Court is extended the right to create a set of guidelines for bankruptcy procedure alongside Title 11 of the United States Code, the Bankruptcy Code.

Today, there are nine sections within the Federal Rules of Bankruptcy Procedure (FRBP). Among the particular elements spelled out by the FRBP include the roles of all parties directly involved in court meetings/hearings, how proceedings may begin, how creditors' claims must be regarded by debtors and the court alike, how estates may be sold and reorganized, appeals to higher courts, and how criminal proceedings may come to be. 


What You Should Know About Bankruptcy Appellate Panel

What You Should Know About Bankruptcy Appellate Panel

Ideally, bankruptcy court proceedings
will work to the benefit of debtors and creditors, allowing the former to
maximize the value of their possessions and cancel out their debts, and the
latter to recoup as much money as possible given the previous inability of
debtors to repay what they owe. Just as well, either the lenders or
bankrupt parties may find that justice was not served in a ruling by the
bankruptcy court judge. In this instance, and especially
for bankrupt individuals, there is recourse
for a given decision.


Following a hearing in bankruptcy court,
the logical next step is a bankruptcy appellate panel
(BAP). Although not an institution in all
circuits, bankruptcy appellate panels have an important function in those
regions that do include it. Some notes on the use of bankruptcy appellate
panels in American history:


In terms of the creation of a special
division to handle appeals after an initial bankruptcy court finding, the
origins of appellate panels for this purpose lie in previous amendments to
bankruptcy law enacted in the last 30 years.
Bankruptcy appellate panels are presided over by three
bankruptcy judges who also serve their jurisdictions on a regular basis. As
with any bankruptcy court, these appellate panels are guided to a large
extent by the Federal Rules of Bankruptcy Procedure.


However, as BAPs are a branch of the U.S.
Court of Appeals system, they are also subject to the constraints of the
Federal Rules of Appellate Procedure. Of a potential added benefit
to bankrupt petitioners, individual court rules also will impact a case or
motion upon appeal to a BAP.


It should be noted that
appeals do not necessarily need to follow the
progression from bankruptcy court to appellate panel and so on and so
forth. Following a summary judgment out of their favor,
bankrupt individuals may elect to file their motion of appeal with a
district court instead of a bankruptcy appeal court. From there, appeals made
by a district court go to the circuit court, or in some instances, will go
directly from bankrupt court to the circuit court of appeals.