Federal bankruptcy judges oversee cases of people or companies who must liquidate their assets to resolve debts because they can no longer pay their creditors. These judges are officers of the U.S. District Court in which they serve. They receive their appointments to 14-year terms from a majority decision of judges in the U.S. Court of Appeals.
Section 153 of the Title 28 U.S. Code states that federal bankruptcy judges receive annual pay rate that is equal to 92 percent of a district court judge’s salary. As of the time of publication and since 2009, the salary of district judges has been $174,000 per year. (Senators and members of the House of Representatives receive the same pay as district judges.) Taking 92 percent of that amount puts the annual compensation of bankruptcy judges at $160,080. Compare this to the yearly wages of $184,500 for circuit judges, $213,900 for associate judges and $223,500 for the chief justice.
As of 2013, the Administrative Office of U.S. Courts lists more than 225 federal bankruptcy courts, with small states like Rhode Island having only one, and large states like California and Texas having 15 each. Most government employees, such as law clerks, administrative law judges and judicial executives receive locality pay on top of their basic pay. This extra amount takes care of the differing costs of living where they work. Bankruptcy judges, however, receive no such adjustments, any more than circuit or associate judges do.
Bankruptcy judges can appoint employees whose salaries are paid for by the federal government. These workers include a secretary, a law clerk and any additional assistants determined by the Administrative Office of U.S. Courts. The clerk of the court, with approval from the judge, can also hire and fire additional deputies as needed. Although the federal government covers most bankruptcy court expenses, such as facilities and services, the bankruptcy court also may pay for any expenses using the assets of the estate involved in the proceedings. However, it must follow conditions and limits set up by the circuit council that has jurisdiction over the court.
To be considered for an appointment as a federal bankruptcy judge, individuals need neither bankruptcy law experience nor residence in the district where they want to serve. Instead, they must be members in good standing of the state bar in which they practice law and have actively practiced for at least five years. Substitutes for this active practice include any combination of being a state or federal judicial officer, bankruptcy referee, attorney for any federal or state agency, or up to two years as a law clerk to any judge or judicial officer. Candidates also must not be related by blood or marriage to any judge in the district court in which they want to serve.