Help Me Understand Bankruptcy Court
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Posted on April 30, 2007
Filed Under Debt Consolidation, Avoid Bankruptcy, Business Bankruptcy, Chapert 11, Chapter 13, Blog Carnivals |
The bankruptcy court is part of the federal judiciary system within the united states of America. It is important to note that each state has its own laws governing resolution of debts. Because all of the states laws are very different it is impossible for lenders and borrowers to get justice when the lending crosses different states borders.
Due to the huge differences in the laws, the congress decided that the only way to protect both lenders and borrowers was to establish a federal system that will override any state laws and codes that are in practice. This means that every case must be filed in the halls of federal justice. Congress gets the authority to do this directly from the constitution.
There are currently 94 different districts in the united states within the federal system. Each of these districts is responsible for a certain area of America when it comes to the legal resolution of debt.
Federal district judges are appointed to serve and represent the certain regions in the matter of liquidation of legal debt. These judges serve for a term of 14 years and can be reappointed once their term is up. They do not serve for life as many other federal judges. These judges are appointed by the “United states court of appeals”, this is where the correct federal circuit is found.
The US federal district judiciary is responsible for any matter that is filed in that particular district. The cases are assigned to the civil or criminal division depending on the specific case.
Debt resolution is normally assigned to the civil departments, however sometimes it would be forwarded to the criminal departments. For example, if the debt reputation has caused a criminal act by either party involved, this case would then be heard by the united states department of justice, and would be prosecuted to the maximum extent allowed by law.
Most cases go to the civil courts, only a handful get referred to criminal courts. in 2005 around 1.5 million cases of insolvency were filed in the federal system. Most of these were distributed to the civil departments, with only a very small percentage going to criminal bankruptcy court.
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