Yes, a bankruptcy court decision can be appealed but the process is different than other courts. When an individual or business cannot meet their financial obligations, they may elect to file for bankruptcy. Decisions made by bankruptcy judges are binding.

Bankruptcy courts are different from other courts most people are familiar with. Most individuals are familiar with criminal courts, which decide guilt or innocence and civil courts, which can determine liability. Bankruptcy courts are special courts in the United States District Court system. These courts have authority over all aspects of the bankruptcy proceedings. These courts are used to find a resolution between a creditor and an individual who cannot pay their debts. 

Once a debtor’s bankruptcy case is finalized, they are no longer liable for the debts they incurred or they have set up a payment plan so they may keep their property. When the case is completed, the bankruptcy court will enter a discharge order which releases the debtor from their debts, with few exceptions such as child support. The debtor then has a clean financial slate. However, the bankruptcy remains on their credit report for up to ten years.

Bankruptcy courts have limited jurisdiction compared to other courts. These courts can only hear cases of bankruptcy issues. If another issue arises out of the bankruptcy, such as a modification of child support payments, the bankruptcy court cannot hear it. 

Bankruptcy court decisions can be appealed. These appeals are handled differently than in other courts. Bankruptcy courts were created by Congress and do not originate in the Constitution. Because of this, bankruptcy appeals begin in a federal trial court instead of an appeals court. Some circuits, including the First, Sixth, Eighth, Ninth and Tenth, handle appeals using Bankruptcy Appellate Panels (BAP for short). The BAP is a three judge panel that reviews the decision of the bankruptcy judge.

How Do I Appeal a Bankruptcy Court Decision?

If a party to a bankruptcy decision is not satisfied or disagrees with the outcome, they may be able to appeal the judge’s decision. The bankruptcy appeal process can begin with a Bankruptcy Appellate Panel (BAP) or the United States District Court, depending on the jurisdiction. In order for an appeal to be successful, there must have been wrongdoing or failure by the judge. Simply because a party does not like the outcome does not mean they can successfully appeal.

If the jurisdiction uses a Bankruptcy Appellate Panel, both parties must agree the BAP can hear the appeal. There are different procedures for BAP in each jurisdiction. If the parties do not agree to have a Bankruptcy Appellate Panel hear the appeal, the appeal will be heard in the United States District Court where the bankruptcy case was filed.

There are further steps that parties can take after the initial appeal. If one of the parties is not satisfied with the decision of the Bankruptcy Appellate Panel or United States District Court’s decision on their appeal, they may appeal to the Federal Court of Appeals. If either party is not satisfied with the Federal Court of Appeals’ decision, they may appeal to the United States Supreme Court. The Supreme Court may elect whether or not it hears the case. It is rare for the Supreme Court to hear a bankruptcy case.

Can I Refile My Bankruptcy Case in Another Court?

Once the Bankruptcy Court makes a decision, it is unlikely that the debtor can refile the same bankruptcy claim in a different court. A bankruptcy appeal can be taken to district court as noted above if either party to the bankruptcy does not agree to use the Bankruptcy Appellate Panel (BAP). The United States District Court has jurisdiction over bankruptcy cases. The Bankruptcy Court was created by the U.S. District Court to streamline the bankruptcy case process.

The Bankruptcy Court can dismiss a bankruptcy case with or without prejudice. These are legal terms that have specific meanings. In cases where a bankruptcy case is dismissed without prejudice, the debtor can refile their case immediately. If the case is dismissed without prejudice, a debtor can restart the process of their case from the beginning. No information from the previous case will be used against the debtor. If the debtor made any errors or omissions in the previous case, the debtor can refile their case and correct them.

A bankruptcy case may be dismissed without prejudice due to the following factors:

  • The debtor failed to file a required form with the court;
  • The debtor failed to pay court costs or fees;
  • The debtor failed to provide all the necessary paperwork;
  • The debtor failed to attend a hearing; and/or
  • The debtor failed to follow any required procedures.

It is important to note that there will not be punishment for an honest mistake made by the debtor, such as missing a hearing date or forgetting to file a form. The debtor may just have to start the case over again and remember to follow all necessary procedures.

If a bankruptcy case is dismissed with prejudice, the debtor cannot refile. In most cases when a bankruptcy is dismissed, it is with prejudice. When a case is dismissed “with prejudice,” preventing the debtor from filing the same bankruptcy case a second time.

Choosing to refile a bankruptcy case may affect the automatic stay. An automatic stay is issued by the court to stop creditors from collecting on debts, taking property or garnishing wages during the bankruptcy proceedings. If the debtor is filing for bankruptcy a second time in a defined time frame, the automatic stay is limited to 30 days. After the automatic stay expires, creditors may resume trying to collect debts, property and wages unless the court extends the stay. This time limitation is used to prevent bad faith bankruptcy filings.

What Other Considerations Are there with Bankruptcy Appeals? 

It is important to remember that a bankruptcy appeal will only be successful if there was wrongdoing or failure on the part of the bankruptcy judge. Bankruptcy is more of a negotiation style proceeding, unlike a criminal or civil proceeding which determines guilt, innocence or liability. The debtor needs to keep in mind that they make choices regarding how they want to handle their obligations and an appeal cannot be used as a tool when the debtor changes their mind. 

Bankruptcy is a complicated process that will affect a debtor’s financial situation for many years. It is important for a debtor to make sure bankruptcy is the right choice for them. They must either give up property or make payment plans to keep their property. An appeal will not release the debtor from obligations regarding their property if they change their mind years after the case is finalized.

Do I Need a Lawyer to File a Bankruptcy Appeal?

Since bankruptcy proceedings and appeals can be complicated, having a qualified bankruptcy lawyer is important to your case. A qualified bankruptcy lawyer can help evaluate whether there are grounds for an appeal. 

A bankruptcy lawyer may also help determine whether or not an appeal would be successful. Since the appeals process may go through different courts, each with different requirements, a bankruptcy lawyer can help you navigate those courts.