28 U.S.C. 157 is the federal statute that tells bankruptcy judges what they can decide on their own and what they can only recommend to a district judge. It works alongside 28 U.S.C. 1334, which gives district courts jurisdiction over bankruptcy cases in the first place. Section 157 lets each district court hand those cases down to its bankruptcy judges, sorts the resulting disputes into “core” proceedings the bankruptcy judge decides with a binding judgment and “non-core” proceedings where the bankruptcy judge only proposes findings, and sets special rules for withdrawing cases back to the district court, holding jury trials, and handling personal injury and wrongful death claims.
How a Bankruptcy Case Gets to a Bankruptcy Judge
Bankruptcy judges have no independent jurisdiction. Under 28 U.S.C. 1334, district courts hold original and exclusive jurisdiction over bankruptcy cases and original jurisdiction over civil proceedings arising under the Bankruptcy Code or related to a bankruptcy case.1Office of the Law Revision Counsel. 28 USC 1334 – Bankruptcy Cases and Proceedings Section 157(a) then lets each district court refer any or all of those matters to the bankruptcy judges for the district.2Office of the Law Revision Counsel. 28 U.S. Code 157 – Procedures Virtually every district has a standing order that routes bankruptcy matters to the bankruptcy court automatically.
Because the bankruptcy court’s authority is borrowed rather than inherent, the district court can pull a case back. And what the bankruptcy judge can do once the case arrives depends on which subsection of Section 157 applies.
Core Proceedings: What a Bankruptcy Judge Decides Outright
Section 157(b) lets bankruptcy judges hear and enter final judgments in “core” proceedings, meaning matters that arise under the Bankruptcy Code or within a bankruptcy case.2Office of the Law Revision Counsel. 28 U.S. Code 157 – Procedures These rulings are binding without any sign-off from a district judge, though they can still be appealed.
The statute lists 16 categories of core proceedings. The ones that come up most often include:
- Allowing or disallowing creditor claims and estimating claims for plan confirmation.
- Preference actions brought by the trustee under 11 U.S.C. 547 to recover payments made in the 90 days before filing, or up to a year for insiders.3Office of the Law Revision Counsel. 11 U.S. Code 547 – Preferences
- Fraudulent transfer actions under 11 U.S.C. 548, reaching up to two years before filing.4Office of the Law Revision Counsel. 11 U.S. Code 548 – Fraudulent Transfers and Obligations
- Automatic stay disputes under 11 U.S.C. 362, including motions to lift the stay and claims that a creditor violated it.5Office of the Law Revision Counsel. 11 U.S. Code 362 – Automatic Stay
- Dischargeability determinations on whether a particular debt survives bankruptcy.
- Confirmation of Chapter 11 reorganization plans, Chapter 12 farm plans, and Chapter 13 wage-earner plans.6Office of the Law Revision Counsel. 11 U.S. Code 1129 – Confirmation of Plan
- Disputes over the validity, extent, or priority of liens on estate property.
- Recognition of foreign bankruptcy proceedings under Chapter 15.2Office of the Law Revision Counsel. 28 U.S. Code 157 – Procedures
The through-line is that these are questions the Bankruptcy Code itself creates or that only exist because a bankruptcy case is pending. That is what makes the bankruptcy judge the right person to enter a final order on them.
Non-Core Proceedings: Proposed Findings for the District Court
Section 157(c) covers “related to” proceedings. These are matters that touch the bankruptcy case but do not arise under the Bankruptcy Code itself. A breach of contract claim the debtor was pursuing before filing, a partnership dispute, a lender liability claim, or many tort actions typically fall here. State law or non-bankruptcy federal law drives the outcome; the bankruptcy connection is that the result will affect the estate.
The bankruptcy judge can still hear these cases, but cannot enter final judgment. Instead, the judge submits proposed findings of fact and conclusions of law to the district court.2Office of the Law Revision Counsel. 28 U.S. Code 157 – Procedures The district judge then enters the final order after review under Federal Rule of Bankruptcy Procedure 9033.7Legal Information Institute. Federal Rules of Bankruptcy Procedure – Rule 9033 – Proposed Findings of Fact and Conclusions of Law
That review is not a rubber stamp. Under Rule 9033, the district judge conducts de novo review of any finding or conclusion that a party has specifically objected to in writing, and can accept, reject, or modify the proposed findings, take additional evidence, or send the matter back with instructions.7Legal Information Institute. Federal Rules of Bankruptcy Procedure – Rule 9033 – Proposed Findings of Fact and Conclusions of Law Findings that go unchallenged receive more deferential treatment, so specific, timely written objections matter for anyone who disagrees with the bankruptcy court’s work.
There is a shortcut. If every party consents, the district court can refer the non-core matter to the bankruptcy judge to hear and decide with full authority, the same as a core proceeding.2Office of the Law Revision Counsel. 28 U.S. Code 157 – Procedures Parties often take this route because the bankruptcy judge already knows the case, and routing proposed findings through a district judge adds delay.
Stern Claims: Statutorily Core but Constitutionally Not
The line between core and non-core is not just a statutory question. In Stern v. Marshall (2011), the Supreme Court considered a debtor’s counterclaim against someone who had filed a claim against the estate. Section 157(b) lists that kind of counterclaim as core. The Court held that while the statute authorized the bankruptcy court to enter final judgment, the Constitution did not: the counterclaim was essentially a state law tort that did not depend on the bankruptcy process to resolve, so only an Article III judge could enter a final decision.8Legal Information Institute. Stern v. Marshall
That created a category of “Stern claims,” matters that look core on paper but cannot constitutionally be decided with finality by a bankruptcy judge. In Executive Benefits Insurance Agency v. Arkison (2014), the Supreme Court answered what to do with them: the bankruptcy court treats the claim as non-core, hears the matter, submits proposed findings of fact and conclusions of law, and lets the district court enter final judgment after de novo review.9Justia U.S. Supreme Court Center. Exec. Benefits Ins. Agency v. Arkison, 573 U.S. 25 (2014) Section 157(c)’s non-core procedures fill the gap once the “core” label is stripped away for a particular claim.
Withdrawing the Reference
Section 157(d) lets the district court pull a case or proceeding back from the bankruptcy court. Withdrawal comes in two forms.2Office of the Law Revision Counsel. 28 U.S. Code 157 – Procedures
Mandatory withdrawal applies when resolving the case requires substantial interpretation of both the Bankruptcy Code and other federal laws regulating organizations or activities affecting interstate commerce. Courts read that requirement narrowly. A proceeding entangled with federal securities regulation or antitrust law may trigger mandatory withdrawal; one that merely mentions a federal statute usually will not.
Permissive withdrawal is available whenever the district court finds cause. Courts weigh judicial efficiency, the complexity of the issues, whether a jury trial has been demanded, and whether the legal questions fit the district court’s broader docket better. The party seeking permissive withdrawal has to justify it.
Jury Trials in Bankruptcy Court
The Seventh Amendment preserves a jury trial right in suits at common law where more than twenty dollars is at stake.10Congress.gov. U.S. Constitution – Seventh Amendment Bankruptcy courts are not Article III courts, so they cannot conduct jury trials on their own authority. Section 157(e) allows a bankruptcy judge to preside over a jury trial only when the district court has specifically designated the judge to do so and every party expressly consents.2Office of the Law Revision Counsel. 28 U.S. Code 157 – Procedures If any party refuses consent, the trial moves to the district court.
Whether a jury right exists at all depends on the claim. Actions for money damages on breach of contract, fraud, or conversion carry jury rights; claims seeking injunctions or specific performance do not. In Granfinanciera, S.A. v. Nordberg (1989), the Supreme Court held that a party sued by a bankruptcy trustee to recover a fraudulent monetary transfer is entitled to a jury trial, provided that party has not filed a proof of claim against the estate.11Legal Information Institute. Granfinanciera, S.A. v. Nordberg, 492 U.S. 33 (1989) Filing a proof of claim can pull the related dispute into the equitable claims allowance process and cost the creditor the jury.
Personal Injury and Wrongful Death Claims
Section 157(b)(5) singles out personal injury and wrongful death claims. The district court must order these tried before a district judge, not a bankruptcy judge.2Office of the Law Revision Counsel. 28 U.S. Code 157 – Procedures The statute also removes them from the core proceeding list for purposes of liquidation or estimation, so the bankruptcy court cannot value them for distribution.
What counts as a personal injury tort is not always obvious. Physical injuries and related emotional distress are covered. Purely economic torts are disputed, and some courts have held defamation does not qualify. Getting the classification wrong can land a claim in the wrong court. In mass tort bankruptcies, where a debtor faces hundreds or thousands of personal injury claims, this provision forces those claims into district court and shapes how the bankruptcy case moves toward resolution.