A bankruptcy case itself is not an adversarial process where two parties present conflicting positions to be decided by a judge or jury. In most cases, a debtor simply files a bankruptcy petition with supporting information, which is examined by a bankruptcy trustee, and the debtor never sees a judge or his or her creditors.

What is an adversary proceeding?

In some cases, however, disputes arise related to bankruptcy, which may result in an adversary proceeding. An adversary proceeding is a separate lawsuit filed within the bankruptcy case typically by a creditor, a trustee, or the debtor. Adversary proceedings are initiated by the filing of a formal complaint and in many aspects they resemble a typical civil case. A filing fee is required in most instances when filing an adversary proceeding, unless the plaintiff is the debtor in a Chapter 7 or 13 case and the adversary proceeding is related to the debtor’s discharge. The bankruptcy case that the adversary proceeding relates to must be open at the time the complaint is filed.

What are common adversary proceedings in bankruptcy?

Common adversary matters brought by creditors involve dischargeability of a particular debt or denial of a discharge of all debts. The trustee can file an adversary proceeding to ask the court to deny a bankruptcy discharge (typically when the debtor lied on the bankruptcy schedules or hid assets) or to recover preferential payments and fraudulent transfers. The most common reason debtors file adversary proceedings is to seek redress against their creditors for violating the automatic stay or to seek revocation of a discharge.

How can we help?

Some matters brought through an adversary proceeding may be negotiated and settled directly with the plaintiff. Others may involve complicated factual circumstances and legal questions that need to be tried. Although legal representation for an individual plaintiff or defendant is not required to bring or defend an adversary proceeding, one must be familiar with the Federal Rules of Bankruptcy Procedure, local court rules, and substantive bankruptcy law. It is therefore strongly recommended that the debtor facing an adversary proceeding retain legal counsel.

At Anna Handy Law Firm, P.A. we can file an adversary proceeding on your behalf or defend it. Call us now for a consultation. (386) 248-3000.