Jurisdiction refers to the power of a court to exercise power over a case. In order for a court to hear a certain case, the court needs to have the authority to exercise its power over the person bringing the case and the authority to exercise power over the subject matter of the case. In a bankruptcy proceeding, a bankruptcy court must be able to exercise power over the debtor and the subject matter of the case.
In determining whether a court has jurisdiction of any kind, you must follow a two-step process. First of all, you must satisfy a statute. Secondly, you must satisfy the Constitution. Article I, Section 8 of the United States Constitution gives Congress the authority to establish uniform bankruptcy laws throughout the United States. The federal bankruptcy code occupies its own section of the United States Code, which is a collection of federal statutes.
Title 11 of the United States Code is also known as the federal bankruptcy code. Federal bankruptcy jurisdiction gives the district court both original and exclusive jurisdiction over all cases arising under Title 11 of the United States Code. Therefore, the federal bankruptcy court has original and exclusive jurisdiction over bankruptcy cases filed within the United States. This means that only a bankruptcy court has jurisdiction over a case when a person files a bankruptcy petition.
The section of the United States Code that sets forth judicial procedure gives the district courts original jurisdiction but not exclusive jurisdiction over all civil proceedings arising under Title 11 of the United States Code. An example of a civil proceeding arising under Title 11 of the United States Code would be an adversary proceeding. When a person files a bankruptcy petition in an effort to discharge his debt, he could be met with opposition from his creditors. In opposing the discharge of a particular debt, a creditor can file an adversary proceeding seeking a judgment that would prevent the discharging of this particular debt. The bankruptcy court has original jurisdiction over this adversary proceeding, but not exclusive jurisdiction. The defendant seeking to make the bankruptcy petitioner pay the debt could just as well file his adversary proceeding in state civil court.
Case law has held that federal bankruptcy jurisdiction extends to cases under Title 11, proceedings arising under Title 11, proceedings arising in a case under Title 11 and proceedings related to a case under Title 11.