What is the Bankruptcy Court Process?

In the United States, bankruptcy court is operated as part of the Federal judicial system. However, it is important to understand that every state has their own laws relating to bankruptcy. This created some unbreakable barriers for creditors and debtors when they were dealing with different states. As a result the Federal system was designed to take a higher power than any such state laws. This is the reason why every person or business who files for bankruptcy has to do so in Federal Court.Right now the Federal system operates in 94 judicial districts. Each district is responsible for bankruptcy court for a specified area of the United States, Washington DC, and Puerto Rico. Federal judges are appointed for each judicial district by the United States Court of Appeals. Their goal is to take the individual circumstances into consideration and then apply the state rules as well as the Federal rules that apply.They are responsible for determining the process of liquidation relating to a person’s or businesses debts. Each Federal judge is appointed for a period of 14 years and then reviewed for another term after that. They also decide if the bankruptcy should be classified and operated in the civil or criminal division. Once that decision has been made the case is placed on the docket for a hearing to take place with both the debtor and the various creditors.Almost all cases involving bankruptcy are classified as civil matters. There are some exemptions that have to be taken into consideration though. If the debt has resulted in a criminal act taking place by either the debtor or the creditors it can be prosecuted to the full extent of the law. Sometimes if the debtor was involved in a criminal act to get the accounts then it will be assigned to criminal court as well. Such cases are then assigned to the criminal division.More than 1,650,000 cases of bankruptcy were filed in 2005 with almost all of them being assigned to the civil division of a Federal bankruptcy court. You will need to seek the assistance of legal counsel to file the bankruptcy on your behalf in the Federal court. From there a review of your case will be scheduled.

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