Chapter 7 Judge's Duties in U.S. Bankruptcy Courts
Judges preside over all Chapter 7 cases in US bankruptcy courts. They act as both judge and jury which concentrates judicial authority into one person. When appearing in US bankruptcy courts, debtors, creditors and trustees may offer evidence, yet judges determines the credibility of evidence presented and weight to assign. US bankruptcy courts are also empowered with broad discretion applying the law.
Many tasks performed by US bankruptcy courts are routine. They must conduct hearings to approve all discharges in Chapter 7 & confirm all plans in Chapter 13. The average consumer case is not contested and hearings progress smoothly. But not always. US bankruptcy courts preside over contested hearings and adversary proceedings which require a significant portion of the court's time.
US bankruptcy courts also place great weight upon the recommendations of trustees in routine matters. For example, if a trustee recommends discharge is granted, debtors' attendance in US bankruptcy courts may not be required. Alternatively, if a trustee objects discharge, debtors' attendance is mandatory to avoid denial. All US bankruptcy courts focus upon speedy resolution of all matters and rely upon trustees.
Other common hearings include: creditors' motions to lift stays, approval of reaffirmation agreements, confirmations of Chapter 13 plans, and motions to dismiss the debtor's case.
Notice how a judges authority to dismiss cases may be based on "unreasonable" actions or "substantial abuse." These tests rely upon the discretion of US bankruptcy courts to fairly and impartially apply the law. Currently, pending new bankruptcy laws will either severely limit or eliminate US bankruptcy courts' discretion and require automatic dismal based solely on any creditor's request, subject to strict rebuttal requirements.
The Bankruptcy Abuse Prevention and Consumer Protection Act was highly supported by creditors, banks, lenders and The Financial Services Round - a lobby of 100 wealthiest financial institutions in the United States. This proposed Act has been revamped and referred to Congress many times since 1994. The Act is expected to pass both houses at any time and will limit consumer access to US bankruptcy courts dramatically, and restrict the judicial role of US bankruptcy courts to administrative duties in many new circumstances, under sole control of the President.
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