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The Federal District Court System, and the U.S. Bankruptcy Courts
There are 94 U.S. district courts in the United States, Puerto Rico, the Virgin Islands, the District of Columbia, Guam, and the Northern Mariana Islands. There are also two special trial courts within the federal district court system that have nationwide jurisdiction over certain types of cases. The term jurisdiction refers and relatesto the right and authority of the court to hear the case and determine a winner and loser based on applicable law.
The Court of International Trade addresses cases involving international trade and customs issues. The United States Court of Federal Claims has jurisdiction over most claims for money damages against the United States, disputes over federal contracts, and unlawful "taking" of private property by the federal government as well as a variety of other claims against the United States.
Federal District Courts hear the original dispute. Appeals of federal distict court decisions are made to one of the thirteen federal Courts of Appeal. The final option or recourse would involve the loser appealing a verdict by the federal Court of Appeals to the United States Supreme Court.
Federal district courts have jurisdiction over bankruptcy cases because the U.S. Bankruptcy code is a federal law. Each of the 94 federal judicial districts handles bankruptcy matters within its jurisdication. The primary purposes of the bankruptcy code are:
- To give an honest debtor a "fresh start" by relieving the debtor of most debts, and
- To repay creditors in an orderly manner, and
- To provide adequate protection for the interests of creditors.
From this, we can conclude that bankruptcy is essentially for the benefit of the debtor that can no longer pay the debts owed. Bankruptcy allows debtors to resolve debts through the distribution of cash resulting from the sale of non-exempt assets to its creditors.
Edited by Michael C. Dennis and Michael Zininberg. Mr. Dennis is a consultant and the author of "Credit and Collection Handbook."