| Home | User Submitted Articles | Bankruptcy in the US | Debt Restructuring | Financial Distress | Bondholder Haircuts |


| US Bankruptcy Home | Bankruptcy Chapters | Voluntary vs Involuntary Bankruptcy | Bankruptcy Estate | Bankruptcy Court | Bankruptcy Trustee |

United States Bankruptcy Courts

US bankruptcy courts are legislative courts, created under Article I of the Constitution

United States bankruptcy courts are legislative courts which were created under Article I of the Constitution. They function as units of the district courts and have subject-matter jurisdiction over bankruptcy cases. Because the federal district courts have original and exclusive jurisdiction over all cases arising under the bankruptcy code, (28 U.S.C. § 1334(a)), bankruptcy cases cannot be filed in state court. Each of the 94 federal judicial districts handles bankruptcy matters. The current system of bankruptcy courts was created by United States Congress in 1979.

US Bankruptcy Judges are appointed to 14 year terms

The bankruptcy judges in each judicial district in regular active service constitute a "unit" of the applicable United States district court (28 U.S.C. § 151). The bankruptcy judge is appointed for a term of 14 years by the United States court of appeals for the circuit in which the applicable district is located (28 U.S.C. § 152).

Technically, the United States district courts have subject matter jurisdiction over bankruptcy matters (28 U.S.C. § 1334(a)). However, each such district court may, by order, "refer" bankruptcy matters to the bankruptcy court (28 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) under 28 U.S.C. § 157(d).

Overwhelming majority of bankruptcy proceedings are held before a US bankruptcy judge

The overwhelming majority of all proceedings in bankruptcy are held before a United States bankruptcy judge, whose decision in all matters is final, subject to appeals to the district court. In some judicial circuits, appeals may be taken to a Bankruptcy Appellate Panel ("BAP").

The Federal Rules of Bankruptcy Procedure (FRBP) govern procedure in the U.S. bankruptcy courts.

© 2010 escapefrombankruptcy.com Website Created by Indemand Sales and Solutions http://www.indemand.net/