What Are Bankruptcy Appeals?

In the United States, decisions made by lower courts can generally be appealed in higher, appellate courts. This is true for criminal cases, for civil cases, and also for bankruptcy cases.

If you are not satisfied with a decision made in Bankruptcy Court, you have the right to appeal it. It should be noted, however, that appeals have to have specific reasons based in wrongdoing or failure by the judge. An appeal is unlikely to be successful if it is filed simply because the filer is not happy with the decision. Rather, it must allege that the decision-making process (and therefore the decision) was flawed, due to the judge’s unfair or mistaken decision-making.

The process of appealing a Bankruptcy Court decision is somewhat different from the process of appealing decisions made in other courts. Firstly, the role of the court and the premise of the case are different. In most US courts, there is a “winner/loser” scenario to each case that is resolved (whether by being proven guilty or innocent in a criminal case, or by winning or losing a lawsuit in a civil case). The point of bankruptcy court is to negotiate rather than discern a winner or loser, and to reach a compromise between the debtor and their creditors.

Secondly, the Bankruptcy Courts are created by Congress, rather than being derived from the Constitution like most Federal Courts. Therefore, the structure of the appeals process looks different from that of Constitutionally-based courts. Specifically, in order to appeal a Bankruptcy Court decision, you first move on to a US District Court rather than an Appeal Court. In some circuits, appeals aren’t even handled by courts, but are instead handled by Bankruptcy Appellate Panels (BAP), which are three-judge panels that review the decisions or cases being appealed.

If the District Court or BAP heard your case and you are still dissatisfied, you may appeal to the Federal Court of Appeals. If you are still dissatisfied with the Federal Court of Appeals’ decision, you can move on to the US Supreme Court, which can decide whether or not it will hear your case (which is quite rare for bankruptcy cases).

There is a distinct advantage that those appealing bankruptcy cases have, which is that bankruptcy cases often involve unsettled law. This means that different judges have often interpreted statutes of the Bankruptcy Code differently. These differences of opinion give you a somewhat higher chance of finding a differing opinion held by your District Court or BAP judge, which could work to your advantage and even lead to the decision you’re appealing being overturned. If an appeal judge does decide to overturn the decision, it is returned back to the initial bankruptcy judge to reverse the decision.

If you are considering filing an appeal of a bankruptcy case, it is absolutely crucial to have a knowledgeable, skillful, and experienced bankruptcy attorney. New York Bankruptcy Appeals Attorney Wayne Greenwald is here to help. Call Attorney Greenwald for a free consultation today at (212) 739-7599.