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July 2010

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This article is in the news archives --- for current news go to the Third Branch News.


Judgeships Needed Despite Court Efficiencies

New legal and operational requirements, combined with filing increases over the past five-year period, have created an extraordinary roller-coaster ride for the federal bankruptcy courts, and have exacerbated the previously existing need for bankruptcy judgeships. Calendar-year bankruptcy filings reached an all-time high of 2.07 million in 2005, but the next year—after the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) took effect—plummeted to 618,000. By 2009, the number had climbed back to 1.4 million (a nearly 150 percent increase), and first-quarter filings this year topped 388,000.

Although there have been several significant amendments to bankruptcy law, the 2005 statute represented the biggest change in bankruptcy law since 1978, when the current Bankruptcy Code was created. BAPCPA added new requirements for seeking protection under Chapter 7; imposed mandates for debtors to take credit counseling and financial management courses; substantially increased attorney liability and costs; and created new notice, hearing, and procedural requirements.

“New challenges spawn new solutions. Still, these innovations can only go so far to help with the workload crisis that slows cases.”

“The cases we handle today require more hearing preparation time, more hearing and trial time, and more time to prepare opinions, including those delivered orally from the bench,” said Chief Bankruptcy Judge Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware. “That’s why the Bankruptcy Judgeship Act is so critical. By providing the judgeships needed to help the courts move cases more efficiently, it’s good for both debtors and creditors who must rely on the bankruptcy system.” In addition to increased filings and requirements imposed by BAPCPA, other administrative issues can slow the system. The bankruptcy courts have developed efficiencies to address these issues.

In the District of Delaware, for example, the judges periodically hold open meetings with the bar and training sessions for paralegals. “These training sessions reduce and eliminate practices that do not comply with local rule or procedure, thereby minimizing the time that must be spent reviewing incorrect filings.”

In the U.S. District Court for the Northern District of Iowa, a growing number of Chapter 13 filings required the bankruptcy court’s attention. “We met on a number of occasions with the assistant U.S. trustee and Chapter 13 trustee to develop uniform processes and procedures that assist with the complexities inherent in Chapter 13 case processing,” Bankruptcy Judge Paul Kilburg said.

“We also have developed a partnership with the University of Iowa Law School and the state’s Legal Services Corporation to institute a pro se clinic on site, to assist the increasing population of persons who file petitions without a lawyer’s assistance,” he said.

Bankruptcy Clerk of Court Sean McAvoy added that the Northern District of Iowa bankruptcy court also “completely redesigned our pro se center on our website, and added other features to increase the information readily available at the click of a mouse, in hopes we will reduce the need for call-ins to the clerk’s office.”

In addition, bankruptcy courts have made exceptional use of the Judiciary’s Case Management/Electronic Case Files system to generate notices and other tasks automatically, which frees up staff for more analytical and decision-making work. The U.S. Bankruptcy Court for the Western District of Texas developed the E-Orders application, which provides attorneys with an easy, electronic means to submit proposed orders, and supports the processing of orders. About one-third of the nation’s 90 bankruptcy courts use E-Orders now.

“Additional judgeships are still needed in many districts to handle the overwhelming workload.”

Some courts are using an automated docketing interface, or ADI, that determines when certain conditions exist in a case; it then automatically dockets the appropriate event. Using ADI relieves those courts’ employees from manually docketing many routine entries.

New challenges spawn new solutions. Still, these innovations can go only so far to help with the workload crisis that slows cases.

Additional judgeships are still needed in many districts to handle the overwhelming workload. The Senate Judiciary Committee reported bankruptcy judgeships legislation, H.R. 4506, on May 27, 2010. The Bankruptcy Judgeship Act of 2010 would provide for bankruptcy judgeships that the bankruptcy system needs to keep moving cases expeditiously. The bill passed the House earlier this year.

“The sheer volume of the filings,” Carey said, “has required us, simply, to work harder and longer.”