United States bankruptcy court
United States Bankruptcy Courts are Article I federal courts that have subject-matter jurisdiction over bankruptcy cases. Bankruptcy cases cannot be filed in state court. Each of the 94 federal judicial districts handles bankruptcy matters. The current, separate system of bankruptcy courts was created by the United States Congress with the Bankruptcy Reform Act of 1978.
Federal bankruptcy judges
Each bankruptcy judge is a judicial officer of the U.S. district court to which he or she is assigned. The U.S. court of appeals for each circuit is in charge of appointing bankruptcy judges in their circuit to renewable fourteen-years terms.
Number of judges
As of September 2012, there were 352 authorized bankruptcy judgeships, including 34 temporary judgeships.
The number of bankruptcy judgeships is determined by Congress. Congress receives periodic advice on the number of bankruptcy judges needed from the Judicial Conference of the United States.
In May 2012, the U.S. Congress extended the terms of 29 temporary bankruptcy judges. The Temporary Bankruptcy Judgeships Extension Act of 2012 will allow those 29 bankruptcy judges to serve for an additional five years.
History of judgeships
The position of bankruptcy judge was officially created by the Bankruptcy Reform Act of 1978, though in 1973, the title of "Judge" was applied to the position previously known as "Referee." In 1973, the Commission on Bankruptcy Laws of the United States recommended the establishment of bankruptcy judgeships. The position of Referee was established by the Bankruptcy Act of 1898, and these judicial officers slowly saw their authority expand under subsequent federal legislation before the official creation of judgeships.
Northern Pipeline case
In the 1982 case Northern Pipeline Construction Co. v. Marathon Pipe Line Co., the defendant argued that the Bankruptcy Courts did not have Article III protection, and therefore lacked the authority to decide the case. In response, the Bankruptcy Amendment Act of 1984 made the Circuit Court of Appeals responsible for the appointment of judges and declared that bankruptcy judges are "judicial officers of the United States district court." it also created qualifications to serve as a bankruptcy court judge and authorized the creation of councils to recommend individuals for vacancies.
Bankruptcy courts and associated circuit courts
- 1st Circuit
- 2nd Circuit
- 3rd Circuit
- 4th Circuit
- 5th Circuit
- 6th Circuit
- 7th Circuit
- 8th Circuit
- 9th Circuit
- 10th Circuit
- 11th Circuit
- By State
- District of Alaska
- District of Arizona
- Central District of California
- Eastern District of California
- Northern District of California
- Southern District of California
- District of Hawaii
- District of Idaho
- District of Montana
- District of Nevada
- District of Oregon
- Eastern District of Washington
- Western District of Washington
History of the bankruptcy courts
- 2005: Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 passed. It revised how individuals file for personal bankruptcy.
- 1994: Bankruptcy Reform Act of 1994 created to improve efficiency in bankruptcy proceedings.
- 1984: Bankruptcy Amendment Act of 1984 reduced authority of bankruptcy courts, following a 1983 ruling by the Supreme Court of the United States. This act changed the method of appointment and clarified the position of bankruptcy judges.
- 1980: Bankruptcy Tax Act of 1980 created to cover tax-related issues left out of 1978 Act.
- 1978: Bankruptcy Reform Act of 1978 created. This law still serves as the governing legislation for the U.S. bankruptcy courts.
- 1973: Position of bankruptcy judge was created.
- 1946: Referees receive fixed salary.
- 1938: The Chandler Act of 1938 was created in response to Great Depression. It also enhanced role of referees.
- 1898: Bankruptcy Act of 1898 created. It established "referees" to act as administrator in bankruptcy cases.
- 1878: Law repealed by Congress.
- 1867: Third bankruptcy law created in aftermath of Civil War. This was the first law to include protection for corporations.
- 1843: Law repealed by Congress.
- 1841: Second bankruptcy law created in response to Panic of 1837.
- 1803: Law repealed by Congress.
- 1800: First bankruptcy law created as a result of land speculation.
This table pulls statistics from the United States Courts website as of March 31. It shows overall statistics for the United States Bankruptcy Courts.
|Year||Filings||Filings compared to previous year||Terminations||Terminations compared to previous year||Pending|
Title 11 specifies the United States Bankruptcy Code, following its adoption on November 6, 1978. For the full document, see BankruptcyLawReview.com, Title 11 - Bankruptcy.
- Chapter 7: Chapter 7 of the bankruptcy code provides for the complete liquidation of a company or individual. In either case, the company or organization does not exist after completion of bankruptcy filing. Organizations that file for Chapter 7 bankruptcy are so far in debt that reorganization of funding will not suffice, and creditors will not be able to get any amount of money back from reorganization. With Chapter 7, the United States government sells, through a trustee, all of the unnecessary goods for survival of the individual. All money goes to creditors, then bond holders, and finally stock holders.
- Chapter 9: Chapter 9 explains procedures for the reorganization of municipalities (including cities and towns, villages, counties, taxing districts, municipal utilities and school districts).
- Chapter 11: Chapter 11 concerns the payment of debts to creditors through the reorganization of a company. Under this chapter, the company is reorganized under supervision of the United States government. Next, all profits are sent to creditors, bond holders, and finally stock holders. With these cases, the company is required to have their reorganization deemed appropriate and beneficial to the creditors. This requires the participation of the United States bankruptcy courts and bankruptcy lawyers.
- Chapter 12: - Chapter 12 Bankruptcy is reserved for farmers, ranchers, and those in the area of agriculture. This is very similar to the proceedings in Chapter 13, but gives additional benefits to farmers, including but not limited to restrictions of non-purchase by creditors.
- Chapter 13: Chapter 13 Bankruptcy is a version of Chapter 11, reserved for individuals. This provides for the reorganization of the individual under the supervision of the United States government. Any nonessential profits are given to creditors. This also requires presentation of a plan to the United States Bankruptcy Courts.
- Chapter 15: Chapter 15 was added to the Bankruptcy Code with the Bankruptcy Reform Act of 2005. This corresponds to the United Nations Commission on International Trade Law, and is the federal adoption of international cross-border insolvency cases.
- United States Courts, Bankruptcy
- Federal Judicial Center, Bankruptcy Judgeships
- United States Courts, Bankruptcy Basics
- Cornell Law School, Legal Information Institute: Appointment of Bankruptcy Judges
- Bankruptcy Judgeships Information from the Federal Judicial Center.
- United States Courts, "Congress Extends Temporary Bankruptcy Judgeships," May 11, 2012
- United States Bankruptcy Courts legislation#History of the bankruptcy courts
- BankruptcyData.com, A Brief History of Bankruptcy
- Federal Judicial Center, History of the Federal Judiciary: Landmark Judicial Legislation
- United States Courts, Bankruptcy Statistics: March 2013
- United States Courts, Chapter 7: Liquidation Under the Bankruptcy Code
- United States Courts, Chapter 9: Municipality Bankruptcy
- United States Courts, Chapter 11: Reorganization Under the Bankruptcy Code
- United States Courts, Chapter 12: Family Farmer or Family Fisherman Bankruptcy
- United States Courts, Chapter 13: Individual Debt Adjustment
- United States Courts, Chapter 15: Ancillary and Other Cross-Border Cases