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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. SeeBankruptcy Fees. The bankruptcy case that the adversary proceeding relates to must be open at the time the complaint is filed.
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.
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 at the debtor facing an adversary proceeding retain legal counsel.
Chapter 13 Eligibility
Chapter 13 Required Documents
Step-by-Step Chapter 13 Process
Typical Chapter 13 Timeline
Benefits of Chapter 13 over Chapter 7
Benefits of Chapter 7 over Chapter 13
Key Differences Between Chapter 7 and Chapter 13
Chapter 13 Co-Debtor Stay
Chapter 13 Plan Requirements
Chapter 13 Plan Good Faith Requirement
Classification of Creditors
Chapter 13 – “Strip Down”
Chapter 13 – “Strip Off” and Valuation of Property