Adversary Proceeding

By Daisy Rogozinsky
May 31, 2022

If problems arise during a bankruptcy case, the debtor, creditors, and trustee all have the option of filing an adversary proceeding. In this article, we’ll explain what adversary proceedings are as well as how they work. 

Key Takeaways

  • An adversary proceeding is a type of bankruptcy proceeding arising out of a bankruptcy case
  • Adversary proceedings are separate lawsuits with their own case numbers 
  • Adversary proceedings can be brought by a creditor, debtor, or bankruptcy trustee
  • Adversary proceedings may be brought over a number of issues including challenging the dischargeability of debts and voiding fraudulent transfers made by the debtor prior to filing the bankruptcy petition
  • Adversary proceedings follow a similar process to civil lawsuits beginning with a petition and moving to a court hearing if no settlement can be reached outside of court
  • Both sides in an adversary proceeding should be represented by legal counsel 

What Is an Adversary Proceeding?

An adversary proceeding is a separate lawsuit filed within a bankruptcy case beginning when a creditor, a bankruptcy trustee, or the debtor files a complaint asking the court to rule on a bankruptcy-related issue. You can think of it as the bankruptcy court’s version of a civil lawsuit or as another type of bankruptcy litigation.

Most bankruptcy cases are settled without adversary proceedings. However, sometimes problems or questions do arise. That is where adversary proceedings come in.

Issues that people may bring an adversary proceeding over include:

  • Objecting to or revoking the debtor’s discharge
  • Challenging the dischargeability of a particular debt
  • Subordinating a claim or interest
  • Regaining property that the debtor transferred or sold to someone else prior to their bankruptcy
  • Getting rid of junior liens on real estate
  • Recovering money paid to a creditor shortly before the bankruptcy was filed
  • Claiming that a debt is within one of the exceptions to discharge
  • Claiming that the debtor provided false information to the creditor or incurred the debt in anticipation of filing the bankruptcy
  • Recovering damages for a creditor’s misconduct

How Adversary Proceedings Work

An adversary proceeding is considered to be a separate court proceeding from the bankruptcy case and is given its own case number. If an adversary proceeding is filed against you or you plan to file an adversary proceeding, you should be represented by legal counsel.

The adversary proceeding process usually follows these steps:

  • The plaintiff files a complaint or petition in the bankruptcy court. The plaintiff’s attorney files the petition and represents the petitioner throughout the process.
  • The defendant is given the opportunity to file a response to the claim. If no response is filed, the court can enter a default judgment against the defendant.
  • If the defendant challenges the complaint, both sides collect evidence. 
  • The two sides may attempt to resolve the disagreement through negotiations.
  • If there is no settlement negotiated, the court holds a hearing in which both sides can present their evidence and respond to claims. 
  • After the hearing, the court determines an outcome. This has the potential to affect the bankruptcy case.

Featured Bankruptcy Lawyers

Rasor Law Firm

Google rating
32 years in practice
Bankruptcy, Criminal Defense, Divorce & Family Law, Employment Law, Personal Injury
View Profile

The Meister & McCracken Law Firm

Google rating
14 years in practice
Bankruptcy, Criminal Defense, Social Security Disability
View Profile

Timothy Denison, Esq.

Google rating
31 years in practice
Bankruptcy, Criminal Defense, Divorce & Family Law, DUI Law, Traffic Ticket
View Profile

George Law

Google rating
16 years in practice
Business Law, Criminal Defense, DUI Law, Sexual Assault
View Profile

The Law Offices Of Barton Morris

Google rating
24 years in practice
Criminal Defense, DUI Law
View Profile

The Law Offices of Marc E. Hart

Google rating
38 years in practice
Criminal Defense, DUI Law, Sexual Assault
View Profile

Related Posts

Fraudulent Transfer
Daisy RogozinskyJune 13, 2022
Statement of Intention
Daisy RogozinskyJune 20, 2022
Lia Kopin-GreenApril 26, 2022
Daisy RogozinskyJune 6, 2022
Attorney At Law is changing how clients connect with lawyers. By providing an innovative platform to lawyers who want to expand their practice’s reach, AAL is bringing law practices into the future.
6142 Innovation Way
Carlsbad, California 92009
© 2022 Attorney at Law | All rights reserved
Some of the content of this website may be considered attorney advertising under the rules of certain jurisdictions. The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute an attorney-client relationship.
crossmenuchevron-upchevron-down linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram