Bankruptcy Courts in the USA

When an individual or company cannot meet the obligations to its creditors nor has any funds to plan for such eventuality then there is no recourse but to file for bankruptcy. The case for bankruptcy is as a rule filed in a bankruptcy court. Bankruptcy courts in America have had a checkered history. After the war of Independence a lot many white settlers who had come to Americans became bankrupt. Soon the government had to get down working out taxes and other things. Among them the first bankruptcy law was enacted in 1800.

It was repealed in 1803. This was the beginnings of the United States bankruptcy courts. The second bankruptcy law came a good thirty years later in 1837. This law was again repealed in 1843. After the Civil War (1861-65), yet another bankruptcy law was enacted in 1867 and again repealed about ten years later at in 1878. Clearly at that time the founding fathers of this nation had a lot of other things on their mind than bankruptcy laws. However banking law was not completely ignored. They made a mention of Bankruptcy in the Constitution (Article 1, Section 8, and Clause 4).
United States Bankruptcy Courts exist in all of the legal districts of the nation. They are housed in buildings that do not catch the eye but the United States Bankruptcy Court with their writings has made a mark especially the United States Bankruptcy Code.

The United States Bankruptcy Court has always followed the concept of a humane and reformist approach. It was a revolutionary step. In times past, the debtor was usually beaten up and/or thrown into jail for not paying the bills. In America, instead of throwing debtor’s into prison, the debtor is usually given a fresh chance and recovers his self respect and makes a new start in life.
The current United States Bankruptcy Code came into effect in 1878. This replaced the original Bankruptcy Act of 1898. This code, like most of American law, isn’t sacrosanct. It can be amended and has been many times since 1978. The latest major change was in 2005 under the Bankruptcy Abuse Prevention and Consumer Protection Act.

As the American population has risen, so has the rate of bankruptcies. This especially put a strain on the United States Bankruptcy Court in the late 1980”s and early 1990’s. Thus there was no choice but to carry out reforms and stream line the bankruptcy courts. The purpose is that the bankruptcy courts process as quick as possible for both businesses and individuals needing to declare bankruptcy. Thus the bankruptcy courts follow the act in letter and spirit.

As things stand bankruptcy laws are federal and applicable to the entire United States. Presently in all there are 94 bankruptcy courts each having a specific jurisdiction? These Bankruptcy courts are part of the United States District court and are presided over by a separate judge. These judges are usually appointed for a term of 14 years. To file for bankruptcy the debtor has to approach the bankruptcy court in the place he resides.
The case will then be heard in the Bankruptcy court. A U.S. bankruptcy judge is a judicial officer of the U.S. district court who is appointed by the majority of judges of the U.S. court of appeals to exercise jurisdiction over bankruptcy matters. The number of bankruptcy judges is determined by Congress. The Judicial Conference of the United States is required to submit recommendations from time to time regarding the number of bankruptcy judges needed. Bankruptcy judges are appointed for 14-year terms.
Bankruptcy courts also have the office of the clerk in their premises so that fees and levies can be deposited by the persons seeking an insolvency there itself.
Bankruptcy courts have done yeoman service to the nation and we are all thankful for their role and existence.