District Bankruptcy Court -- Bankruptcy Rules -- US Bankruptcy Court

District Bankruptcy Court

Bankruptcy cases are handled by a district bankruptcy court, in each of the 94 federal judicial districts in the United States. Each state has one or more judicial district, and each of the judicial districts has a bankruptcy court. 

A US bankruptcy court is a federal court that usually has its own clerk’s office. State courts don’t have jurisdiction over bankruptcy cases, though they can pass laws governing other aspects of the relationship between the debtor and the creditor.

A United States bankruptcy judge, who is a judicial officer of the district court, has the power to make decisions regarding federal bankruptcy cases. The bankruptcy process involves a lot of administrative work that is conducted outside the court house. 

This administrative process is often carried out by a trustee, who is appointed by the court to supervise the case. A debtor’s involvement with a bankruptcy judge may be quite limited.

In most cases, the only formal proceeding that a debtor is required to attend is the meeting with the creditors, which is held at the office of the trustee. 

The constitution of the United States authorizes Congress to enact uniform laws regarding bankruptcy, and Congress enacted the Bankruptcy Code in 1978, which is codified as title 11 of the United States code. The Bankruptcy Code is the federal law that governs all bankruptcy cases. 

The procedure of bankruptcy rules process is governed by the Bankruptcy Code, Bankruptcy Rules (Federal Rules of Bankruptcy Procedure), and the local rules of each district bankruptcy court. 

A debtor may have very limited interaction with the bankruptcy judge. Normally the only formal proceeding that the debtor has to attend is the meeting with the creditors, which is held at the office of the trustee.

The Bankruptcy Code provides for six basic types of bankruptcy:

Chapter 7 bankruptcy is the most common type of bankruptcy proceeding and it involves the appointment of a trustee who liquidates the non-exempt assts of a debtor and distributes the proceeds among the creditors. 

Chapter 13 bankruptcy, which, is meant for individual debtors who have a regular income, allows debtors to keep their valuable property like their home, and to file a plan for approval of the bankruptcy court, to repay the creditors over a period of 3 to 5 years.

Chapter 11 bankruptcy is normally used by commercial enterprises. It allows them to continue their operations and to pay their creditors at the same time, through a reorganization plan that has been approved by the bankruptcy court. 

Chapter 12 bankruptcy is meant for farmers or fishermen with a regular annual income, and like Chapter 13, it allows them to repay their creditors over a period of time that normally does not exceed 3 years, while they continue their business operations.

Chapter 9 bankruptcy is meant to adjust the debts of municipalities, while Chapter 15 is meant for entitled ancillary and cross-border bankruptcy cases.