Over View of Bankruptcy Courts and Bankruptcy Code
Origin of Bankruptcy Court
Bankruptcy means when an individual or an entity is unable to pay his debts and takes legal recourse in a court of law. Bankruptcy can only be filed in a bankruptcy court. Bankruptcy courts in America have existed ever since the War of Independence in 1776. At that time many settlers became bankrupt. The government enacted the first Bankruptcy law in 1800. It was repealed in 1803. Bankruptcy courts thus took roots in the United States of America.
The second bankruptcy law was enacted in 1837. This law was repealed in 1843. After the Civil War (1861-65), Congress enacted the 1867 law which was again repealed in 1878. Bankruptcy in the Constitution is mentioned in Article 1, Section 8, and Clause 4. It is a federal law.
Each legal district has a United States Bankruptcy Court. The United States Bankruptcy Court decides cases with a reformist approach. In times past, the debtor was usually beaten up and/or thrown into jail but the reformist trend in America means that a debtor is given a fresh chance in life.
The current United States Bankruptcy Code came into effect in 1878. This replaced the original Bankruptcy Act of 1798. This code is not sacrosanct and has been changed a number of times. . The last major change was in 2005, when George Bush was President
As things stand bankruptcy laws are federal and applicable to the entire United States. Presently in all there are 94 bankruptcy courts .These courts in effect are part of the United States District court. Judges of the Bankruptcy courts are appointed for a term of 14 years
. A U.S. bankruptcy judge is a judicial officer of the U.S. district court. He is appointed by U.S. court of appeals. Congress is the sole authority to decide on the number of Bankruptcy judges and courts. Recommendations are made by The Judicial Conference of the United States from time to time in this matter. Judges of bankruptcy courts are federal officers and are appointed for a term of 14 years.
An American citizen can file for bankruptcy only in the designated court which has jurisdiction at the place of his residence.Each Bankruptcy court will have its own office and a clerk for deposition of fees and levies. Bankruptcy courts have done great service to the nation and have stabilized the state of bankruptcies and financé in the USA.