The Federal Rules of Bankruptcy Procedure (FRBP) are rules that control how US Bankruptcy Courts process a bankruptcy case. In other words, the FRBP control how a bankruptcy case flows through the court system. These rules set the procedures for filing a bankruptcy petition from start to finish. They control how to file documents, set time limits and establish official forms; they also control the process to appeal a bankruptcy case.
In the US, when a person or a business cannot pay their debts, they may petition the court for a bankruptcy. A bankruptcy allows a court to discharge debts or reorganize debts depending on the type of bankruptcy. When the court discharges a debt, it eliminates the obligation to pay the debt. A reorganization of debt means that the court sets up a plan that requires the petitioner to pay the debt for a set number of years.
The US Bankruptcy Code and the Federal Rules of Bankruptcy Procedure are technical and complex. This often forces a debtor, the person requesting a bankruptcy, to hire a lawyer to help him file a petition for bankruptcy. The lawyer interviews his client to understand the client’s situation, and he compiles a list of all the debts his client owes. He then uses the Federal Rules of Bankruptcy Procedure and the Bankruptcy Code to decide which type of bankruptcy his client may request. The lawyer then prepares the bankruptcy petition using the official forms the FRBP require.
After the lawyer prepares the documents, he files them with the bankruptcy court. The Federal Rules of Bankruptcy Procedure require the petitioner to send copies of the documents to all creditors to notify them of the bankruptcy petition. Once the petition is filed, it triggers the time limits contained in the Federal Rules of Bankruptcy Procedure. These time limits include deadlines to file other documents such as motions and deadlines for creditors to file objections to the bankruptcy. A motion is a document that requests the court to make a ruling on the case.
The Federal Rules of Bankruptcy Procedure oversee the appeal process, which allows the petitioner, creditors, or any party unhappy with a decision made by the bankruptcy court to take their case to a higher court. The FRBP establish when, where and how an appeal may be filed. The US Supreme Court may amend or modify rules for appeal in addition to the Federal Rules of Bankruptcy Procedure as a whole.