4 Situations in Which a Debtors Bankruptcy Case Can Go Directly to the Circuit Court of Appeals

Most bankruptcies aren’t very complicated. In fact, many are simply no-asset chapter 7 cases, and the remaining chunk—especially in Las Vegas—involve an underwater house. However there are situations when bankruptcy cases will encounter issues that need judicial review by a law court and not a bankruptcy court. For example, we recently covered the Hedlund student loan bankruptcy case that went up and down the Ninth Circuit’s bankruptcy appellate panels and twice to the Circuit Court of Appeals. That case dealt with a factual issue, whether the debtor made a good faith effort to repay his student loans, but there are times when it’s possible to forgo the endless appeals to the federal district court or a bankruptcy appellate panel and instead go directly to the circuit court of appeals.

Before 2005, a party (sometimes it was the creditors who appeal cases) could not appeal final judgments, orders, and decrees directly to a circuit court. Since the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, however, such orders could be appealed for cases that were filed after October 17, 2005. 28 U.S.C. § 158(d)(2) creates a certification process that moves a case from bankruptcy court to the circuit court, skipping over either the district court or the bankruptcy appellate panel. A party to the order can ask for certification, all (or a majority of) the parties can request certification, and the bankruptcy court can certify an order on its own initiative. Certification can only happen in four circumstances:

(1)  The judgment, order, or decree involves a question of law as to which there is no controlling decision of the court of appeals for the circuit or of the Supreme Court of the United States.

(2)  The judgment involves a matter of “public importance.”

(3)  The judgment, order, or decree involves a question of law requiring resolution of conflicting decisions.

(4)  An immediate appeal from the judgment, order, or decree may materially advance the progress of the case or proceeding in which the appeal is taken

Certification doesn’t stay the proceedings in any bankruptcy case unless the court issues a stay of proceedings, and parties have only 60 days to file request certification.

It’s unlikely that most debtors in bankruptcy will need to expedite their cases to a circuit court for review. However, the new system in place will save debtors further costs in bankruptcy.

For more questions about bankruptcy in Las Vegas, please feel free to contact an experienced Haines & Krieger Las Vegas bankruptcy attorney for a free initial consultation. Call us at 1-702-880-5554 to set up your free consultation.