The Anatomy of the U.S. Bankruptcy Court System

June 22, 2015

Once upon a time, most laymen knew what “going to court” meant. Today, we have a complex web of hierarchical courts and subject matter specific courts, both state and federal. Fortunately, navigating the bankruptcy system is fairly easy to understand.

Most bankruptcy cases never progress past the bankruptcy court. In fact, most bankruptcy debtors never even see the bankruptcy judge. For cases that are difficult or unique, it is important to know the bankruptcy court system.

First (Lowest) Court Level
Jurisdiction to hear bankruptcy cases belongs exclusively to the federal courts. Federal district courts have original and exclusive jurisdiction to decide newly filed bankruptcy cases. In almost all of the 94 federal judicial districts, bankruptcy cases are “referred” to the bankruptcy court, a special unit of the district court. As a practical matter, most district courts have a standing order directing all bankruptcy cases to the bankruptcy court.

Second Court Level
When a bankruptcy court decision is appealed, the second level of courts is either the federal district court in the same district as the bankruptcy court, or to the Bankruptcy Appellate Panel. Only the First, Sixth, Eighth, Ninth, and Tenth Circuits have convened these panels, which are composed of bankruptcy courts judges from around the Circuit.

Third Court Level
The next level of bankruptcy appeals is to the United States Court of Appeals. The Court of Appeals is divided geographically into eleven judicial circuits. Circuit courts of appeals only decide bankruptcy cases filed within their own circuit.

Final Court Level
The “court of last resort” is the United States Supreme Court. The Supreme Court has over 10,000 appellate cases brought before it every year. Nine justices have little hope of being able to review each one, and thus have discretion to decide whether to take certain types of cases. Typically, the Supreme Court hears 75-80 cases a year, meaning that less than one percent of all appeals are actually reviewed by the Supreme Court.

If you are considering filing for bankruptcy please call the experienced attorneys at Fears | Nachawati Law Firm to set up a free consultation. Call 1.866.705.7584 or send an email to fears@fnlawfirm.com.

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