Bankruptcy

Filing Bankruptcy and Your Bankruptcy Judge

By Russell A. DeMott, Charleston Bankruptcy Lawyer

When you file bankruptcy, you might think you?ll have a trial in a courtroom with a judge ruling on whether you can discharge your debts.  Clients in my Charleston, South Carolina bankruptcy practice often have that misconception of the bankruptcy process.  It makes sense to think of a judge in a courtroom because that?s how things are done in most other types of cases such as divorces or other state court cases.  But that?s not how it works in bankruptcy court.

Bankruptcy is a mostly administrative process.  A bankruptcy trustee will be assigned to your case.  The trustee, not the judge, will preside over your bankruptcy hearing?called a “341 hearing” (after the Bankruptcy Code section) or “First Meeting of Creditors.”  In the vast majority of bankruptcy cases, debtors never see the judge assigned to their case.

Bankruptcy?at least most of the time?is more like a probate proceeding than, say, a divorce case.  When I think of probate, I think of it as bankruptcy for dead people.  It?s more than that, of course, but the probate and bankruptcy systems have similar elements (notice to creditors, a claims process, and distributions of property).  Both are what we call an ?administrative proceeding.?  Again, this is true most of the time.

Sometimes, however, you will appear before the bankruptcy judge.  That could happen, for example, if an “adversary complaint” is filed against you, or if you file an “adversary complaint” against someone else.  Then the administrative process turns into ?litigation.?  Suing and perhaps suing back (called a ?counter complaint?), as well as depositions, interrogatories, requests for admissions, and subpoenas might all be part of the adversary proceeding.  And for all that, you?ll need a judge.  The judge will also be the ?finder of fact? in most instances.  That means he?ll determine who wins and who loses after a trial.

Bankruptcy judges also need to rule on objections to confirmation in Chapter 13 cases.  Most of the time, however, you’ll simply resolve objections to confirmation without the need for appearning in court.

Therefore, most of the time you won?t see a judge when you file bankruptcy?and that?s not a bad thing!  It just means you?ve got a routine case in which there?s no need for a hearing or trial.

Full post as published by Bankruptcy Law Network on May 29, 2010 (boomark / email).