The bankruptcy process is governed by Title 11 of the United States Code. It is a federal law that uniformly governs all bankruptcy cases. In addition to Title 11, bankruptcy procedure are governed by the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”) and local rules adopted by each bankruptcy court.
Every state is divided into judicial districts and each district has a bankruptcy court. Bankruptcy cases are presided over by a bankruptcy judge, who can decide any matter in a bankruptcy case, including eligibility to file and discharge of certain debts. In most personal bankruptcy cases (particularly Chapter 7 and Chapter 13), however, you will not interact with the judge. The process is often more administrative than judicial. The administrative aspects of a bankruptcy case are overseen by a bankruptcy trustee. The trustee is appointed by the court to oversee the bankruptcy case.
In most bankruptcy cases you don’t have to appear before a judge! The case is handled administratively by the bankruptcy trustee.
Your formal involvement in a bankruptcy case is usually limited and rarely involves appearing before a judge. Often the only appearance you need to make in a bankruptcy case is the creditors meeting (also known as the “341 meeting because it is governed by Section 341 of the bankruptcy code). The 341 meeting is an opportunity for creditors and the trustee to question you about debts and property, but commonly no creditors show up and only the trustee asks questions.
The end result of a bankruptcy proceeding is the bankruptcy discharge. The discharge carries out the law’s intent to give you a “fresh start” free from most debts. As noted by the US Supreme Court:
[I]t gives to the honest but unfortunate debtor … a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt. Local Loan Co. v. Hunt, 292 U.S. 234, 244 (1934).
The bankruptcy discharge releases you from personal liability for specific debts that existed at the time you filed for bankruptcy and prohibits creditors from ever taking any action against the you to collect those debts.
The following pages discuss the different types of bankruptcy cases, the timing of the bankruptcy discharge, debts that are or are not discharged, objections to discharge and when the discharge may be revoked. There is also a glossary that explains many of the terms and legal concepts of bankruptcy.