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Understanding Bankruptcy

Bankruptcy is a part of federal law, so a bankruptcy case cannot be filed in a state court. Article I, Section 8, of the U.S. Constitution authorizes Congress to enact "uniform Laws on the subject of Bankruptcies." Under this grant of authority, Congress enacted the "Bankruptcy Code" in 1978, which is codified as title 11 of the United States Code.

The procedural aspects of the bankruptcy process are governed by the Federal Rules of Bankruptcy Procedure (often called the "Bankruptcy Rules"), which also prescribe official forms for use in bankruptcy cases. In addition, each bankruptcy court has adopted local rules and forms which must be used for cases in that jurisdiction.

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. Much of the bankruptcy process is administrative, however, and is conducted away from the courtroom. 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.

A debtor's involvement with the bankruptcy judge is usually very limited. In a typical chapter 7 or 13 case, a debtor will not appear in court unless there are objections raised by creditors or other parties in interest. Usually, the only formal proceeding at which a debtor must appear is the meeting of creditors held shortly after the beginning of the case. This meeting is informally called a "341 meeting" because section 341 of the Bankruptcy Code requires that the debtor attend this meeting so that creditors can question the debtor about debts and property.

For further information about the bankruptcy process, review Bankruptcy Basics.

Read this notice:

Notice Required by 11 U.S.C. § 342(b) for Individuals Filing for Bankruptcy