Who processes a bankruptcy petition?

A bankruptcy petition is processed by a federal court. This is due to the fact that bankruptcy law in the United States is governed by federal statutes, chiefly the Bankruptcy Code. When an individual or business files for bankruptcy, they do so in a federal court that has jurisdiction over bankruptcy cases.

The federal court evaluates the petition and determines the appropriate course of action, whether that involves discharging debts, establishing a repayment plan, or liquidating assets. This centralized approach ensures consistency in the application of bankruptcy law across the country.

Understanding the roles of local government offices, state treasuries, and private lenders in the context of bankruptcy is important as well. Local government offices typically do not handle bankruptcy cases, state treasuries are involved in state-level financial matters rather than federal bankruptcy laws, and private lenders are creditors that may be impacted by a bankruptcy filing but do not process the petition itself.