The United States was among the first countries in the world that took a humane view of a man becoming bankrupt and unable to pay his debts. The US law was thus reformative in nature and still continues to be so. Bankruptcy law in the USA is a federal law and covered by an act of Congress. The Bankruptcy code has been amended a number of times. The last amendment was in 2005.

The United States is a nation which is federal in nature and the states of this union are deemed to be autonomous to a certain extent. Bankruptcy law is however a federal law and by corollary applicable to all states. The bankruptcy cases can only be heard in the United States bankruptcy court as per the Federal Bankruptcy Act enacted by Congress. Each state of the union is theoretically supposed to have its own bankruptcy court. A resident ordinarily staying in a particular state can file his bankruptcy plea only in the state in which he resides. Each of these Bankruptcy courts cover delineated areas and could encompass many counties. A court clerk is attached to each court for ease of filing petitions without wastage of time. Presently there are 94 federal courts specified to hear bankruptcy pleas. State courts have no jurisdiction over bankruptcy cases.

- The federal government is responsible for staffing and administering the US Bankruptcy court. The appointment of the judges in particular is also the responsibility of the Federal government. They are usually appointed for a term of 14 years each. The United States Court of appeals for the given circuit/district appoints the judges.

In Technical terms the United States district courts are supposed to have jurisdiction over all bankruptcy cases. But each district court will refer bankruptcy matters to the bankruptcy courts in that area.

- The vast majority of all cases filed for bankruptcy in the United States are always heard by a US bankruptcy judge.The decision of the bankruptcy court is final and binding. However all decisions of the bankruptcy court are subject to appeal and judicial review under the aegis of the district judge or a Bankruptcy Appellate Panel. Bear in mind that as a general rule all District courts have a standing reference order that allows the bankruptcy cases to be heard by the bankruptcy court. This reference can also be withdrawn but it hardly happens.

The Bankruptcy laws have been enacted and interpreted in a way that a person overburdened by debt has an honorable exit to restart his life. These proceedings help the creditors get a fresh lease of life after their debts are liquidated under chapter 7. They also have a chance to be totally free of all debts under chapter 13 which stipulates a structured payment over a period of 3 to 5 years by helping them with a repayment plan.

The Act of 2005 has brought in a new parameter in the form of a Bankruptcy Code. This enjoins all individual debtors to be educated and counseled on their problem before filing for bankruptcy. The counseling has to be carried out by an approved credit councelling agency. Among other tasks approval for these credit counseling agencies also comes under purview of the bankruptcy court. The court will accordingly file and make public if required a list of such agencies.