For many consumers and businesses looking for relief from crushing debts, bankruptcy is a necessary process. However, the process can be complex, lengthy and discouraging, especially when bankruptcy judges are at premium and carry overwhelming workloads. Frustration only mounts for those in need of help.
According to a bipartisan group of U.S. senators, permanent temporary bankruptcy judge positions are set to expire. They have introduced The Bankruptcy Judgeship Act of 2017 to prevent any shortfalls.
Last year, the same group proposed similar legislative action, but no action was taken.
The bill would make temporary judgeships permanent in Delaware, Florida, Maryland, Michigan, Nevada, North Carolina, Puerto Rico, Tennessee, and Virginia. Additionally six permanent judges would be added with two each in Delaware, Michigan, and Florida.
The lawmakers want Congress to act quickly to prevent busy courts in nine districts from being besieged with more cases than they can handle. The bill would ensure that bankruptcy judges will not be left with what they fear are “crushing caseloads” that restrict timely access to bankruptcy courts for consumers and businesses.
The retirement of one temporary bankruptcy judge alone had severe repercussions. Remaining judges had to collaborate to balance caseloads to ensure prompt hearing of cases.
A 2016 Annual Report of the Administrative Office of the U.S. Courts (AOUSC) count 349 judges authorized and funded, including 33 temporary jurists. The study also shows that bankruptcy petitions are in decline, dropping six percent nationwide year after year. Last year saw 805,000 filings.
Specific data includes:
- Chapter 7 bankruptcies reduced nine percent to 498,367
- Chapter 13 bankruptcies only fell one percent to 299,150
- Chapter 11 bankruptcies increased six percent to 7,450
Since Chapter 11 business filings require the most court resources, a lack of judges would create a significant backlog in cases. Delaware in particular is well known for many Chapter 11 cases.