An Adversary Proceeding in bankruptcy is a separate lawsuit filed within the bankruptcy case. Like most lawsuits, it starts when someone (the creditor, the bankruptcy trustee, or you) files a complaint. Many bankruptcies go through to completion and discharge without any Adversary Proceedings. However, there are times that a bankruptcy will go through an Adversary Proceeding.
A creditor or the bankruptcy trustee might bring an Adversary Proceeding to challenge the ability to discharge a particular debt. Typically, they will allege that you incurred the debt through fraud. Or the trustee might seek to regain property that you transferred or sold to someone else prior to your bankruptcy. You can bring an Adversary Proceeding too. For example, in many districts, you can only get rid of junior liens on real estate through an Adversary Proceeding.
Though individuals may seek bankruptcy protection, not all debts are dischargeable in bankruptcy. If someone owes you a debt based on fraud or misrepresentation, they may not be able to shed that debt in bankruptcy. Sean Gavin is experienced in both pursuing and defending Bankruptcy Adversary Proceedings. If someone is seeking to collect money from you through an Adversary Proceeding, or if you believe that your debt to a third party should not be included in their bankruptcy, call or email today for a consultation.