Us Bankruptcy Court

The US Bankruptcy Court - How Lenient?

Bankruptcy helps people who can no longer pay their creditors get a fresh start by liquidating their assets to pay their debts, or by creating a repayment plan. The bankrupt is not at all hopeless. Almost all federal judicial districts (94 of all United States districts) handle bankruptcy matters. These bankruptcy cases are always filed in a US bankruptcy court. The US bankruptcy courts (s) are special units of the 94 United States district courts that especially deal with bankruptcy cases. Yet, some bankruptcy cases, particularly regarding the validity of claims and exemptions, are often highly dependent on a particular state court law; hence it is often unadvisable to generalize bankruptcy issues beyond their state regulations although bankruptcy cases generally can not be filed in US state courts.

The Individual US Bankruptcy Court (s) may be found in:

Alabama Middle District
Alaska District
Arizona District
California Central District
Colorado District
Georgia Middle District
Illinois Northern District
Indiana Northern District
Iowa Northern District
Maine District
Massachusetts District
Minnesota District
Missouri Eastern District
New Hampshire District
New York Southern District
North Carolina Eastern District
North Dakota District
Pennsylvania Eastern District
South Carolina District
Tennessee Western District
Texas Northern District
Utah District
Vermont District
Virginia Western District
Wyoming District


There is a bankruptcy court (s) for each judicial district in the United States. Over all, there are 90 bankruptcy districts across the US, each generally having their own clerk's offices.


Lenience of the US Bankruptcy Court:

The bankrupt individual is dealt with more lenience in the United States than in perhaps any other country. The bankrupt's business initiative is not subdued by the threat of criminal or civil penalties because of his unintentional commercial failure.

This is evident in Chapter11 of the bankruptcy code, which permits courts to reorganize the assets of failing businesses instead of ordering complete liquidation of their assets. Also, the 1978 revision of the code made it easier for corporate management to remain in control of a company during reorganization. These more lenient provisions led to a rapid increase in filings in the 1980s and 1990s. However, in 2005 the Congress passed a significant revision to the bankruptcy code, affecting individuals. Under this new law, it is harder for an individual to file a Chapter7 bankruptcy (extinguishing a person's debts), while it is easier for his creditors to demand repayment of his debt over time. The changes were strongly supported by banks and credit card companies, but were a criticized by a number of experts for placing additional burdens to middle income families while excusing benefiting bankrupt municipalities, corporations and wealthy individuals.


For more information on bankruptcy court, visit the US Government information site.