Bankruptcy Litigation – Generally

Unlike many lawyers who avoid complex bankruptcy issues, the attorneys at Cohen & Cohen, P.C., regularly litigate in the bankruptcy courts and have experienced first-hand the myriad of issues that arise.  We have represented and defended against bankruptcy trustees, creditors, and debtors in all types of actions.  Despite the fact that the vast majority of our regular cases go off without a hitch, our clients benefit immeasurably when the hire us because we have seen it go wrong, very wrong.  In fact, because of this our clients have a better chance to have their case move smoothly through the system.

So what is bankruptcy litigation?  The answer is difficult to state because it comprises an incredibly broad spectrum of dispute resolution.  This is because, put simply, anything that money touches, so does bankruptcy.  It is important to keep in mind that there are material exceptions to what can and cannot be decided in bankruptcy court.  Injury in tort like wrongful death is off limits.  So are entering divorce decrees, criminal matters, social security benefits, and all sorts of practice areas for which the bankruptcy court doesn’t have jurisdiction.  However, in instances such as these bankruptcy courts could handle the question of whether an obligation stemming from a divorce was meant to be child support or an allocation of property.  They can decide in what order to pay a criminal restitution victim and how much in relation to their creditors.  They can decide whether or not social security benefits are exempt or non-exempt.

In fact bankruptcy litigation is very similar to civil litigation because oftentimes determining the answer is largely, if not completely, dependent on state law.  However there are some very important differences.  There is the Bankruptcy Code itself.  A tome of specific statutes as implemented in 1979 Bankruptcy by Congress.  All bankruptcy litigation is controlled by the Code.  Next, the litigant should remember that bankruptcy courts are a division of the federal district courts.  That means this is federal litigation and subject to federal court rules.  To get even more technical, the federal courts actually have original jurisdiction for bankruptcy matters but they automatically refer bankruptcy matters to the bankruptcy courts.  In some instances a litigant can move to withdraw that reference depending on the circumstances.

There are also specialized rules of bankruptcy procedure.  The federal rules of bankruptcy procedure largely mirror the federal rules of civil procedure but there are oftentimes vast and unique differences between the two.  Not only that, almost all bankruptcy courts will have Local Rules.  Local Rules can vary quite a bit from jurisdiction to jurisdiction although there is a slow push to standardize as many practices as possible (see Colorado’s Local Rules).  Even the individual judges will sometimes have practice standards and general guidelines for how they run their cases.

In short there is virtually no limitation of the factual scenarios, types of law, and controlling authority that can end up before a bankruptcy court.  The breadth of bankruptcy litigation is vast and possibly encompasses the broadest spectrum of legal issues which can be dealt with in any legal venue.  We will try to identify the most common and interesting areas on our web-site but as you can probably guess there is no way to get them all.

If you have an issue that involves bankruptcy litigation – Call Us Today!

About the Author: Robertson Cohen

Rob Cohen is a Managing Partner of Cohen & Cohen, P.C., serving clients in Colorado and Wyoming. He’s a Chapter 7 Bankruptcy Panel Trustee, certified mediator, and has administered over 8,000 Chapter 7 bankruptcy estates.

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