Will Bankruptcy Judges Interpret the Laws Differently?

Seal of the United States bankruptcy court. Ch...

Seal of the United States bankruptcy court. Church of Scientology attorney Steven Hayes bought rights to the Cult Awareness Network assets during its bankruptcy proceedings. (Photo credit: Wikipedia)

This statement and question was recently written by a blogger on a bankruptcy forum website, “I may not pass the means test. Would it help me if I increased the monthly amount that goes into my 403b?”

Obviously, the question was raised because the blogger was not sure of the bankruptcy laws. Will bankruptcy judges interpret the laws differently, and therefore, answer this particular blogger’s question differently?

Some suggest that yes, bankruptcy judges will interpret laws differently. Therefore, the answer to the blogger’s question would depend on the district bankruptcy court in which you are filing and the bankruptcy judge that presides over that particular district.

According to the United States Courts website, “the U.S. bankruptcy judge is a judicial officer of the U.S. district court who is appointed by the majority of judges of the U.S. court of appeals to exercise jurisdiction over bankruptcy matters. The number of bankruptcy judges is determined by Congress. The Judicial Conference of the United States is required to submit recommendations from time to time regarding the number of bankruptcy judges needed. Bankruptcy judges are appointed for 14-year terms.”

The federal judges on the U.S. Court of Appeals that appoint bankruptcy judges are appointed by the President of the United States and confirmed by the Senate. They are given terms of service in their position for life. Depending who is the President at the time and how the make up of the Senate is a appointment, the judges chosen can certainly be chosen based on political considerations. That means that bankruptcy judges can be chosen for political concerns as well.

United States Trustees are appointed by the Attorney General for a five year term. The Attorney General is a political appointment made by the President of the United States and confirmed by the Senate. The Attorney General remains in office at the pleasure of the President while he or she remains in office.

Bankruptcy courts are legislated through bankruptcy laws made by Congress, but the administrators of bankruptcy law, obviously, have political ties. That fact might sway how judges interpret bankruptcy laws. Therefore, each district bankruptcy courts may have trustees and judges who perceive bankruptcy laws from their particular point of view.

For instance, if you get a bankruptcy judge who supported the 2005 bankruptcy law changes, you might find that the U.S. Trustee serving the judge may take a closer look at adding money to a retirement account within six months before filing. If he or she feels it is an abuse of the system, he or she might then force you to go before the bankruptcy judge to explain your action.

On the other hand, you may be in a district where the judge and the trustee serving him or her may feel that adding money to your retirement before filing is an adult way of preparing for your future so that you will not be any further burden on society. If it helps you to pass the means test, so be it.

How judges and trustees interpret the 2005 laws may be a little different in each situation. Bankruptcy laws give leeway for many points of view. In law, that is what the appeals process are all about.

A bankruptcy lawyer who is experienced in working in the district you choose to file bankruptcy will usually know how the judge and/or trustees may interpret certain rules and regulations of the law.

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