Bankruptcy judges are tasked with evaluating petitions and enforcing bankruptcy laws.
A bankruptcy judge oversees lawsuits in which a person or business files for bankruptcy. In the United States and most other countries, there are specific rules and laws associated with what happens when people don’t pay their debts. Bankruptcy offers a way out for people who can’t pay their bills and are too deep in debt to start paying them. Not everyone can simply file for bankruptcy, and a bankruptcy judge applies the laws to determine if bankruptcy is the appropriate action and if it is permitted by law.
A bankruptcy judge listens to arguments from attorneys representing people who want to file for bankruptcy.
In the United States, bankruptcy laws are governed by federal law. Therefore, a bankruptcy judge is a federal judge and not a state judge. This means that he follows the federal rules of judicial procedure regarding how motions must be filed, the types of cases he hears, and the way arguments are structured. It also means that if a bankruptcy judge allows a person to file for bankruptcy, that person is protected from creditors across the country, not just their state.
A bankruptcy judge will hear arguments from an attorney representing a person who wants to file for bankruptcy. The attorney must show that the person is truly bankrupt as defined by law. The judge will then review the evidence to determine if the person meets the definition of bankruptcy established by the federal guidelines.
In the United States, there are several different types of bankruptcy. For example, Chapter 7 bankruptcy is a full bankruptcy in which a person has most of their debt forgiven. Chapter 13 bankruptcy requires the bankrupt party to pay off a portion of his or her debt as part of a payment plan, while Chapter 11 bankruptcy is primarily used for business bankruptcies.
A judge will determine if the parties have filed the appropriate type of bankruptcy. He will do this by evaluating your financial situation. For example, a person must have income below a certain level to qualify for Chapter 7 bankruptcy.
The bankruptcy judge will then listen to the creditors claiming the assets of the bankrupt person. The bankruptcy judge will decide how assets, if any, will be distributed to creditors. The law sets rules about who gets paid first, and the judge will determine who falls into which category according to the rules and how the assets will be distributed to those parties.
If the party filing for bankruptcy has filed for Chapter 13 or Chapter 11 bankruptcy, the judge will also have to rule on the specific provisions. For example, in the case of Chapter 13 bankruptcy, the judge will make a determination regarding the payment plan established by which the debtor pays some of the creditors. In Chapter 11 bankruptcy, the judge will have to sign off on, or review and decide, the restructuring of the business if it intends to remain open.