An adversary proceeding is a like a lawsuit that takes place as part of a bankruptcy case. Some common examples include creditor objections to the discharge of a specific debt, general objections to granting the filer a , an effort by the to recapture property from a third party, or an action to determine whether a has a valid on the filer’s property. However, many different types of issues can be determined through adversary proceedings in the bankruptcy case. For instance, a contract dispute regarding a debt listed in the bankruptcy might be decided by the Bankruptcy Court as part of an adversary proceeding.
Adversary proceedings are generally the most complicated part of a bankruptcy proceeding. If you’ve received notice that an adversary proceeding has been opened by the Bankruptcy Court, you should seriously consider or reaching out to a organization to get more information about what to expect. Some courts even have a panel of attorneys that will help filers pro bono (for free) in certain adversary proceedings.
What Happens during an Adversary Proceeding?
An adversary proceeding generally runs like a mini-trial. The person who started the proceedings and is asking the court to decide something and will make their case first. Then, the other party will have a chance to respond and make their own arguments. Depending on the type of proceeding, evidence may be presented, usually in the form of documents or witnesses.
Because there are so many different types of adversary proceedings, it is impossible to provide a full description of what to expect. However, if you to represent you in the adversary proceeding, the lawyer will be able to explain in more detail how that particular type of case will move forward.
What Happens if an Adversary Proceeding Isn't Decided in My Favor?
Depending on the type of adversary proceeding, a bad decision for you could mean that you have to pay a debt you hoped to discharge, that a lien is valid and a debt will be treated as secured, or any one of many other possibilities. In some cases, the effect will be small. But, in others, such as a determination that you are not eligible for a discharge, an adversary proceeding can disrupt your whole bankruptcy case.