Federal Bankruptcy Court

There are 94 federal judicial districts in the United States, all of which handle bankruptcy matters. Bankruptcy cases cannot be filed in state court. T here are several bankruptcy courts in each state, and each one's territory covers several counties. There is irony, however, as most creditors' and debtors' rights and obligations in bankruptcy are governed by state, not federal law. Also, to further cloud the issue, the United States district courts have subject matter jurisdiction over bankruptcy. However, each district court may refer bankruptcy matters to the bankruptcy court. Most district courts have a standing “reference” order to that effect, so that all bankruptcy cases in the district are handled by the bankruptcy court. To further confuse you, bankruptcy court judges’ decisions are final, except that they are subject to appeals  to appropriate district judges for review of their decisions .

Bankruptcy Court Information One Should Know

While the bankruptcy code is a federal statutory law, individual states have the right to establish other regulations that affect debtors and creditors. These state laws cannot modify the federal code but may have an effect on how the bankruptcy laws apply to different petitioners. For instance, if you were to file in California bankruptcy court, the laws surrounding community property in that state could affect the way your assets are treated by the court if your spouse is not legally involved in the bankruptcy.

Same Court For Chapter 7 And Chapter 13 Bankruptcy?

Yes. Your selection of a Chapter 7 or Chapter 13 petition does not affect the court. However, your primary location in your state will affect which specific court will get your petition. For instance, in some states there is a southern district bankruptcy court, in which you would file if you lived in that part of your state. If you live in Kansas City, Missouri, you would appear in the western district bankruptcy court of that state. However, your choice of using Chapter 7 or 13 for protection has no bearing on the court in which you will be heard.

Bankruptcy Law Changes And The Court

Recent changes in the federal law require different standards for a person to file a valid petition for bankruptcy protection. The burden of proof of a person’s inability to pay off his/her debts has increased substantially. The federal bankruptcy court or bankruptcy district court must apply these new standards to all petitions coming before them, regardless of the state in which they operate. Hence, the bankruptcy court must now make additional judgments based on the results of the petitioner’s counseling requirement and higher level of proof that a payoff of all debt is a financial impossibility.