The procedural aspects of the bankruptcy process are governed by the Federal Rules of Bankruptcy Procedure (often called the “Bankruptcy Rules”) and local rules of each bankruptcy court. The Bankruptcy Rules contain a set of official forms for use in bankruptcy cases. The Bankruptcy Code and Bankruptcy Rules (and local rules) set forth the formal legal procedures for dealing with the debt problems of individuals and businesses.

Bankruptcy Courts

There is a bankruptcy court for each judicial district in the country. Each state has one or more districts. There are 90 bankruptcy districts across the country. The bankruptcy courts generally have their own clerk’s offices.

The court official with decision-making power over federal bankruptcy cases is the United States bankruptcy judge, a judicial officer of the United States district court. The bankruptcy judge may decide any matter connected with a bankruptcy case, such as eligibility to file or whether a debtor should receive a discharge of debts.

Bankruptcy Trustee

Much of the bankruptcy process is administrative, however, and is conducted away from the courthouse. In cases under chapters 7, 12, or 13, and sometimes in chapter 11 cases, this administrative process is carried out by a trustee who is appointed to oversee the case.

Goals of Bankruptcy

Different types of debtors filing for bankruptcy may have different goals. The goals and type of debtor will determine under which chapter of the Bankruptcy Code the debtor should file a bankruptcy petition.

Chapter 7 Bankruptcy

For instance, under chapter 7 of the Bankruptcy Code an individual or a corporation may seek liquidation of nonexempt assets and discharge of remaining debts.

Chapter 9 Bankruptcy

Under chapter 9 of the Bankruptcy Code a municipality, town, city, village, county, or school district may seek adjustment or reorganization of debts, usually through extension of debt maturities or reduction of principal or interest, or by refinancing.

Chapter 11 Bankruptcy

Under chapter 11 of the Bankruptcy Code a corporation or partnership may seek reorganization to keep the business going and repay creditors over a greater period of time.

Chapter 12 Bankruptcy

Under chapter 12 of the Bankruptcy Code family farmers or fishermen with regular annual income propose a plan to repay all or part of their debts through installments, generally over the course of three to five years.

Chapter 13 Bankruptcy

Under chapter 13 of the Bankruptcy Code, a person with steady income who does not qualify for a chapter 7 bankruptcy may request development of a new plan by which to repay debt over a greater period of time, usually three to five years.

Chapter 15 Bankruptcy

When multiple countries are involved, chapter 15 of the Bankruptcy Code may be used.