The U.S. Bankruptcy Court is empowered to relieve individuals and businesses of the burden of excessive debt
By Barbara Craig, Attorney at Law
The U.S. Bankruptcy Court is a section of the Federal Court System. There are 94 federal judicial districts with at least one district court located in each state, the District of Columbia, Puerto Rico, the Virgin Islands, Guam, and the Northern Mariana Islands.
California, which is under the jurisdiction of the United States Court of Appeals for the Ninth Circuit, has four judicial districts. The Central District handles cases for the counties of Los Angeles, Orange, Riverside, San Bernardino, Santa Barbara, Ventura, and San Luis Obispo. The location of which U.S. Bankruptcy Court a case is filed in is determined by the county that the debtor resides. In Los Angeles County, the U.S. Bankruptcy Court is located in Downtown Los Angeles on Temple Street.
Per Article 1, Section 8, Clause 4 of the United States Constitution, Congress is granted the authority to enact laws covering bankruptcy in the United States. Congress has exercised this power several times in its history, most recently when it adopted the Bankruptcy Reform Act of 1978 which was codified under Title 11 of the United States Code (Bankruptcy Code). The bankruptcy code has been amended several times with the most recent amendment occurring in 2005 under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.
Most Chapter 7 debtors will not appear before a U.S. Bankruptcy Court judge. Instead section 341 of the Bankruptcy Code requires that the debtor attend a meeting before a U.S. Bankruptcy Court trustee, who is appointed by the court to oversee the case so that creditors can question the debtor about debts and property. The hearing, commonly referred to as the meeting of creditors or section 341 hearing, is typically held at the U.S. Bankruptcy Court trustee’s office. If the chapter 7 debtor’s case has no issues with dischargability in the case, no court appearance is necessary.
Chapter 13 debtors also attend a section 341 hearing at the trustee’s office as part of their bankruptcy case. These debtors will also attend a hearing before the U.S. Bankruptcy Court judge who is appointed over the debtor’s case. This hearing before the judge is used to confirm or deny the Chapter 13 plan that the debtor put forth in his bankruptcy case to repay his debts. If a Chapter 13 debtor fails to make his payments or otherwise follow his plan, he will be required to attend additional court hearings to explain himself to the judge.