Federal Courts for Bankruptcy Cases

The average American citizen who has never faced filing bankruptcy before should become familiar with some of the basics about the process of filing. One of the most basic concepts about filing in the United States is understanding that the bankruptcy system is set up by Congress as established by the Constitution. Federal Courts, therefore, are used by the United States to hear all of these type cases.

New Orleans - CBD: John Minor Wisdom United St...

New Orleans - CBD: John Minor Wisdom United States Court of Appeals Building (Photo credit: wallyg)

General Information about the Federal Courts

District courts are the trial courts of the federal court system. They have jurisdiction to hear almost all categories of federal cases, including civil and criminal. The Federal Courts utilized to handle these cases are found in 94 federal judicial districts. The districts encompass 89 federal courts within the continental United States, Puerto Rico, the Virgin Islands, the District of Columbia, Guam, and the Northern Mariana Islands.

District Courts of Bankruptcy

Bankruptcy district courts are separate units of the federal court system having exclusive jurisdiction over these type of cases. There are 94 U.S. Bankruptcy Courts, one for every federal court.

The purpose for the federal courts is to help individuals, who cannot pay their creditors, get a financial fresh start through either liquidation of assets or paying their debts through a repayment plan. The same bankruptcy courts can also help various businesses through either liquidation of assets and/or a reorganization plan.

Federal bankruptcy courts are governed by Title 11 of the United States Bankruptcy Code. The greatest majority of cases filed in these courts are found in three main chapters of the Bankruptcy Code: a Chapter 7, a Chapter 11, and a Chapter 13. Bankruptcy cases cannot be filed in state court.

Bankruptcy Appellate Panels

Bankruptcy Appellate Panels are panels made up of three judges to hear appeals from bankruptcy court decisions and are units of the federal courts of appeals. They were established under the Bankruptcy Reform Acts of 1978 and 1994. These two laws set forth jurisdiction for appeals of bankruptcy decisions and authorizes the establishment of the panels. Bankruptcy judges serve actively as both appellate panel judges and district bankruptcy judges at the same time.

Appeals from orders of bankruptcy judges may be taken either to the U.S. District Court or the Bankruptcy Appellate Panel, depending if one has been established and the district has chosen to participate. Further appeals may be made to the court of appeals for that particular circuit. There are thirteen judicial circuits, each with its own court of appeals. The 1st, 6th,8th, 9th, and 10th circuits have Bankruptcy Appellate Panels. . The smallest court is the First Circuit with six judges, and the largest court is the Ninth Circuit, with 28 judges. Title 28 of the U.S. Code, Section 41 provides a list of the states that compose the circuits. The number of judges in each circuit is set forth in Title 28 of the U.S. Code, Section 44.

All of these federal courts provide evidence the bankruptcy process is serious federal business and exists to work out the complicated bankruptcy laws within the confines of the federal court system. Maneuvering through the system is not wise without the counsel of an experienced bankruptcy attorney to guide you.

 

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