Many Homeowners in foreclosure that are considering filing for Bankruptcy, often wonder how the court system and jurisdiction is structured. This post is designed to get homeowners familiarized with the bankruptcy Jurisdiction.

Bankruptcy courts are the only venue in which bankruptcy cases may be heard in the United States. These specialized courts are subunits of the federal district courts, as established by Congress in 1979. Understanding the system of bankruptcy courts is essential to a clear picture of possible the avenues which your bankruptcy case may take.

How Bankruptcy Jurisdiction is Structured

Unlike the other federal courts, such as the United States District Courts, bankruptcy courts are legislatively created. This means that the courts were established by Congress under its legislative authority to create courts under Article I of the Constitution. Under the federal statute 28 U.S.C. 1334, bankruptcy courts have exclusive jurisdiction over bankruptcy cases. This means that a bankruptcy case cannot be filed in state court. The reason behind this law is that a uniform bankruptcy system requires cases to be filed in a uniform federal system, instead of in different state courts, which may have different rules and regulations.

How Bankruptcy Judges Were Appointed

Bankruptcy judges are appointed for 14 year terms by the United States Court of Appeals for the particular federal circuit in which the bankruptcy court resides. Thus, unlike federal district court and appellate judges, whom are appointed for life, the term of a bankruptcy judge must be renewed every 14 years by the appellate court. It is therefore quite possible for an appellate court to not renew a bankruptcy judge’s term if it is unhappy with his or her performance.

How the Appeal System Works in Bankruptcy

Although all initial bankruptcy matters are handled by a bankruptcy court, appeals of orders, decisions, and judgments on these matters are handled by appellate courts. Some circuits have what is known as a bankruptcy appellate panel. The appellate panel consists of bankruptcy judges from the same circuit who hear bankruptcy appeals. Even in circuits which have a bankruptcy appellate panel, an appellant may choose to have his appeal heard by the local federal district court. The next level of appeal is the United States Court of Appeals for the particular circuit in which the bankruptcy court sits. For example, an appeal from the bankruptcy court in San Francisco will eventually move up to the Ninth Circuit Court of Appeals. The final level of appellate review is the Supreme Court of the United States.

Federal Rules of Bankruptcy Procedure

The proceedings in a bankruptcy courts are governed by the Federal Rules of Bankruptcy Procedure. As the name suggests, these rules govern the procedural aspects of bankruptcy proceedings and trials, such as the time within which you must file your bankruptcy schedules. In large part, the bankruptcy rules of procedure mirror and incorporate the Federal Rules of Civil Procedure, which govern litigation in other federal courts. Thus, litigation in bankruptcy court is very similar to litigation in federal district courts.

How Homeowners Can Find Bankruptcy Courts

If you are considering filing for bankruptcy, it is important to identify and locate the appropriate bankruptcy court. According to federal statute, you must file your bankruptcy case in the federal district in which you were domiciled, had a principal place of business, or principal assets in the United States, within the 180 days prior to filing. Your domicile is your primary residence in which you live. For example, if you have a summer home in Texas, but live nine months of the year in California, your domicile is likely California and not Texas. Once you have determined your domiciled city, go to the US Courts Website. Click your domiciled state on the colored map, then, click “Advanced Search.” Click “Search by Circuit,” choose “Bankruptcy Court” in the drop down menu. Choose your federal circuit according to the colored map and click “Locate.” Find the geographically closest bankruptcy court. Many states have multiple bankruptcy courts. Contact one of the courts to ensure that you choose the proper court.

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