United States bankruptcy courts were created in 1978 and went into effect on April 1, 1984. They function as units of the district courts and have subject-matter jurisdiction over bankruptcy cases. The federal district courts have original and exclusive jurisdiction over all cases arising under the bankruptcy code and bankruptcy cases cannot be filed in state court. Each of the ninety-four federal judicial districts oversees bankruptcy matters.
Technically, the United States district courts have subject matter jurisdiction over bankruptcy matters. However, each such district court may, by order, “refer” bankruptcy matters to the court. As a practical matter, most district courts have a standing “reference” order to that effect, so that all bankruptcy cases in that district are overseen, at least initially, by these courts. However, in unusual circumstances, a district court may “withdraw the reference” of the bankruptcy case.
The overwhelming majority of all proceedings in bankruptcy are held before a United States bankruptcy judge, whose decisions are subject to appeals to the district court. In some judicial circuits, appeals may be taken to a Bankruptcy Appellate Panel (BAP). The bankruptcy judges in each judicial district constitute a “unit” of the applicable United States district court. The bankruptcy judge is appointed for a renewable term of 14 years by the United States Court of Appeals for the circuit in which the applicable district is located.
Trustees are appointed by the courts to represent the interests of the creditors and administer the cases. The U.S. Trustee appoints Chapter 7 trustees for a renewable period of 1 year, Chapter 13 trustees are “standing trustees” who administer cases in a specific geographic region.
The Federal Rules of Bankruptcy Procedure (FRBP) govern procedure in the courts. Unlike most courts, these court’s decisions are not published by the government but rather published by a de-facto source, called the West’s Bankruptcy Reporter.« Back to Glossary