Bankruptcy & The Separation Of Powers – Legislative and Executive Branches

Bankruptcy & The Separation Of Powers – Legislative and Executive Branches

An attorney who can clearly and concisely explain the law, who listens to your ideas, and who explains possible scenarios and provides recommendations for dealing with each of these scenarios is an attorney worth considering to handle your Chapter 7 or Chapter 13 case, Theron Morrison and the attorneys at the Morrison Law Group listen to our clients and always work on behalf of their best interests.

The following is the second part of a blog discussing bankruptcy as an example to explain how the different branches of our government interact.

*The Legislative Branch

Established by Article I of the Constitution, the Legislative Branch consists of the House of Representatives and the Senate, which together form the United States Congress. As well as granting Congress the power to declare war, the right to confirm or reject many Presidential appointments, and substantial investigative powers, the Constitution grants Congress the sole authority to enact legislation.

The Bankruptcy Reform Act of 1978 (Pub.L. 95–598, 92 Stat. 2549, November 6, 1978) is one of the most recent Congressional acts regulating bankruptcy. Along with The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) (Pub.L. 109–8, 119 Stat. 23, enacted April 20, 2005), bankruptcy in the United States is regulated by these two acts of legislation.

The current Bankruptcy Code was enacted in 1978 by § 101 of the Bankruptcy Reform Act of 1978 which generally became effective on October 1, 1979. The current Code completely replaced the former Bankruptcy Act of 1898, also known as the “Nelson Act.” The current Code has been amended many times since its inception in 1978.

The most significant and recent amendment is BAPCPA, which made several significant changes to TIitle 11 aka the United States Bankruptcy Code. BAPCPA attempts to make it more difficult for some consumers to file bankruptcy under Chapter 7. This has not truly been the case since BAPCPA’s enactment, although some would argue otherwise.

The Executive Branch

The Executive Branch carries out and enforces the laws enacted by Congress. It includes the president, vice president, the Cabinet, executive departments, independent agencies, and other boards, commissions, and committees.

The United States Department of Justice (DOJ), better known as the Justice Department, is a federal executive department of the United States government responsible for the enforcement of the law and administration of justice. It may be considered the equivalent to the justice or interior ministries of other countries.

The United States Trustee Program is the component of the Department of Justice responsible for overseeing the administration of bankruptcy cases and private trustees. The United States Trustee Program was created as a pilot program by the 1978 Bankruptcy Reform Act.

Each judicial district has one or more Standing Chapter 13 Trustees. The Standing Trustees are responsible for the administration of all Chapter 13 cases filed in their judicial district. There are usually several Chapter 7 trustees within a judicial district, based on the necessity to handle the number of cases filed. There are currently nine Chapter 7 Trustees who oversee bankruptcy cases in Utah.

When a bankruptcy case is filed in the United States Bankruptcy Court, District of Utah, a trustee from the U.S. Trustee’s Office is assigned to the case. The duties of a trustee include:

  • Collect and disburse funds to creditors in bankruptcy cases under Chapters 7, 12, and 13;
  • Assuring compliance with the Bankruptcy Code concerning information disseminated in cases through reports, schedules, disclosure statements, reorganization plans, and other filings.
  • Reviewing fee applications of professionals, such as attorneys and accountants in Chapter 11 business reorganization cases; and
  • Monitoring bankruptcy cases for fraud and abuse, and referring criminal matters to U.S. Attorneys for prosecution

A bankruptcy judge is also assigned to the case to apply the Bankruptcy Code as amended by BAPCPA to matters involving the debtor, trustee, creditors, and any parties in interest. Any disputes between a debtor and the trustee are settled in bankruptcy court by this judge.

Filing bankruptcy is much less complicated than trying to keep track of how our branches of government interact and interrelate. An experienced and knowledgeable bankruptcy attorney may help simplify the complexities of bankruptcy. The Morrison Law Group has helped 8,000 people file bankruptcy and gain a fresh start.

 

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