Appealing a decision in a bankruptcy case might seem tricky, but in some ways, it’s easier than in other types of litigation. For instance, in most civil litigation, only a “final” decision can be appealed. By contrast, many decisions can change the course of a bankruptcy case or cause irreparable harm to someone involved. As a result, courts usually have a more relaxed view of appeals in bankruptcy.
A bankruptcy case doesn’t end with one big decision that resolves the entire matter. It’s a series of smaller decisions, involving dozens and sometimes hundreds of creditors, all with different interests. It can touch on every aspect of individual filer’s financial life and virtually every aspect of a business.
What sets bankruptcy apart from other types of litigation is that any one of the small decisions could result in harm to someone involved in the case. And, bankruptcy cases can take years to resolve.
During that time, assets depreciate, get lost, suffer damage, or change hands. Even when the assets are liquidated (sold) and proceeds distributed to creditors, it can be difficult to fix an error on appeal if it is late in the case and creditors already received the available funds.
(Learn more about bankruptcy litigation in The Bankruptcy Litigation Process.)
In bankruptcy, if the bankruptcy litigation for a particular issue is considered final, or resolved, it will be appealable. Courts look at several factors when determining finality for a bankruptcy appeal. For instance, One of the factors considered by the court is whether the appeal will promote judicial economy by resolving the case more quickly. But there are more. Here are some others:
In rare situations, a party can appeal an order that is not final, but only if the U.S. District Court or the bankruptcy appellate panel grants the party's motion for leave to appeal. The court that will handle the appeal will consider whether the existing law is unclear or whether an appeal is important in advancing the overall litigation case.
Appealing a case without the help of an attorney is unusual. For tips on hiring counsel, read What to Look for in a Bankruptcy Litigation Lawyer.