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How to Appeal the Bankruptcy Court’s Ruling

A bankruptcy court ruling which is on appeal may be affirmed, modified or reversed; but this cannot happen unless the ruling is found to be clearly erroneous and the credibility of all the witnesses in the case have been confirmed by the bankruptcy judge. The burden of proof is on the party that wants to reverse a bankruptcy court’s ruling. The “party must show that the court’s holding was clearly erroneous as to the assessment of the facts … and not simply that another conclusion could have been reached.” What this means is that the party bringing the challenge must prove that it is not simply a matter of opinion but that the conclusion reached by the bankruptcy court is wrong. Part of the bankruptcy court’s ruling may be wrong or it may be entirely incorrect in its ruling. Whatever the case, the party bringing the appeal must prove with facts that the bankruptcy court’s conclusion was made in error.

What is the Difference Between Opinion and Fact in Bankruptcy?

Let’s take a look at an example:

In a recent bankruptcy case the creditor challenged the bankruptcy court’s opinion that it violated the automatic stay. The creditor had sold a debtor’s real estate property in a foreclosure auction before the debtor filed bankruptcy and then tried to seize the property after the debtor’s bankruptcy filing. ¬†Initially, the creditor was charged with violating the automatic stay; but then the creditor brought up the fact that because they property was sold before the bankruptcy petition was filed, it was not subject to the automatic stay. That is a statement of fact which resulted in the reversal of the bankruptcy court’s decision.