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Bankruptcy Newsletter

The Role of the Bankruptcy Judge

A United States bankruptcy judge has the ultimate discretion whether to grant requests for bankruptcy relief. In addition, the judge can issue any necessary orders to ensure compliance with the bankruptcy laws, and to ensure efficient administration of bankruptcy cases. Depending on what type of bankruptcy is involved, the debtor seeking relief may never be required to appear in front of the judge.

Common Situations

Hearings before a bankruptcy judge may be necessary in the following situations, regardless of what type bankruptcy case (chapter) is involved:

  • Objections to your bankruptcy (by creditors and/or the bankruptcy trustee)
  • Discovery issues (such as debtor failure to produce relevant documents)
  • Violations of bankruptcy laws (for example, improper creditor harassment of debtors after a bankruptcy petition has been filed)
  • Where issues relating to dischargeability of certain debts cannot be resolved without judicial intervention
  • For approval of agreements to reaffirm certain debt obligations
  • To convert the case to another chapter

Chapter 7 Cases

In Chapter 7 bankruptcies (liquidation), most debtors are not required to appear in front of the presiding judge. Rather, the bankruptcy trustee assigned to the individual case will generally oversee its administration and resolution.

Chapter 13 Cases

In Chapter 13 bankruptcy cases, the assigned judge typically approves the debtor’s plan at a formal hearing. This may be the only time the debtor must appear before the judge.

Chapter 11 Cases

Chapter 11 (reorganization) cases typically involve businesses, and consequently a fairly large number of assets and creditors.

Accordingly, the bankruptcy judge almost always plays an active role in administering Chapter 11 bankruptcy cases, supervising and presiding over hearings regarding matters similar to Chapter 7 and Chapter 13 filings and also hearings regarding:

  • Plan confirmations
  • Disclosure statements
  • Employment of professionals such as accountants and appraisers
  • Use of cash collateral
  • Income from Debt Cancellation
    When you obtain bankruptcy relief, you are essentially receiving a financial benefit, because most, if not all, of your debts will be wiped away. The tax consequences of debt relief differ greatly depending upon whether the debt is... Read more.
  • The Scope of the Homestead Exemption
    In states that provide a homestead exemption for debtors who have filed or are contemplating filing for bankruptcy, a debtor’s personal residence will be shielded to some extent from the reach of creditors seeking payment, to... Read more.
  • Supreme Court Limits the New Value Exception to the Absolute Priority Rule
    In the 1999 case, Bank of America National Trust and Savings Association (LaSalle), the U.S. Supreme Court issued a landmark ruling regarding the effect and application of the “new value exception” to the “absolute... Read more.
  • The Appointment of a Trustee in a Chapter 11 Case
    In order to facilitate effective business reorganizations, Chapter 11 bankruptcy is designed to grant a failing business the opportunity to restructure its assets and debts. With this goal in mind, the debtor in a Chapter 11 bankruptcy... Read more.
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