Several sets of intertwining laws and rules apply to bankruptcy proceedings. Bankruptcy is generally controlled by federal laws, but some other laws play a role.
First and foremost, your right to bankruptcy relief derives from the United States Constitution. Article I, Section 8, Clause 4 of the Constitution authorizes Congress to enact “uniform Laws on the subject of Bankruptcies throughout the United States.”
Congress created the federal bankruptcy laws, which are referred to as the “Bankruptcy Code” or simply the “Code.” The Bankruptcy Code is codified in Title 11 of the United States Code. For more information about the Code, please read our article about the Bankruptcy Code.
In addition to the Code, other federal laws impact bankruptcy proceedings and are located elsewhere in the United States Code. Examples include: Title 18 (Crimes), which includes bankruptcy crimes; Title 26 (Internal Revenue Code, or tax code), which gives the tax implications of bankruptcy filings; Title 28 (Judiciary and Judicial Procedure), which gives the basis of authority for the bankruptcy courts.
In addition, some state laws may influence bankruptcy proceedings. In Oregon, as in many states, the exemptions claimed by debtors in bankruptcy are established by state law. Likewise, state laws related to fraudulent transfers and other matters play a role in bankruptcy.
On a procedural level, bankruptcy proceedings are controlled by the Federal Rules of Bankruptcy Procedure (called the “Bankruptcy Rules” or, simply, the “Rules”). Many of the Bankruptcy Rules incorporate the Federal Rules of Civil Procedure, which are applicable to all non-criminal proceedings in the federal courts. In addition, each individual bankruptcy court has a set of local rules that dictate procedures in that specific court.
Lastly, the bankruptcy statutes and rules are interpreted and implemented by case law decisions. Case law decisions are written opinions by judges that interpret laws. Depending on which court the opinion originated from, an opinion may be binding legal precedent or it may serve as persuasive authority that another judge may follow or not. Bankruptcy case law originates out of different sources, including the Bankruptcy Court itself, the Bankruptcy Appellate Panel, the federal Courts of Appeals, and the U.S. Supreme Court. Written bankruptcy opinions are reported in several “case reporters” (written compilations of opinions), such as West’s Bankruptcy Reporter; the decisions are available online through search engines.
The interaction and application of these multiple sets of laws and rules can be difficult to understand. If you have questions about bankruptcy laws and how they may affect you, you should contact an experienced bankruptcy attorney.