Organization and purpose of bankruptcy courts
The federal government operates all bankruptcy courts. Federal laws guide the bankruptcy process, and state law in Florida would not apply to the actual bankruptcy filing. In 1978, the U.S. Congress enacted the laws of the Bankruptcy Reform Act. The purpose of the act was to create a consistent method for managing personal and business bankruptcies across the country.
This system is separate from the other federal criminal or civil courts. It focuses solely on the financial issues of people and businesses struggling with debts and bills. The federal government divides its bankruptcy court into 94 districts. The judges serve 14-year terms, and they are selected by the U.S. Court of Appeals.
The principle residence or place of business of the debtor determines which district a person would use to file. The district might also be based on the location where the main assets of the filer are held. The system includes an appeals process that allows a filer a chance to have a case reconsidered if the first judge’s ruling does not satisfy the filer.
Someone who needs to know more about legal tools for debt relief could consult with a bankruptcy lawyer. The person would need to supply comprehensive financial records so that the lawyer could evaluate income and debts. This information is important because it determines which form of bankruptcy a person might choose. For example, a Chapter 13 filing could give someone with a high income a chance to set up new payment plans. An lawyer might be able to assist a client with the process of negotiating with creditors. Financial records and a settlement proposal might also be presented by the lawyer to the judge. This effort could allow a judge to understand the financial position faced by the filer.