What is An Adversary Proceeding?

An adversary proceeding is a lawsuit specific to a bankruptcy.

A bankruptcy can have zero, one, or many adversary proceedings, depending on the type of debt the filer is attempting to discharge.

Some common examples of adversary proceedings include:

  • A trustee filing an adversary proceeding when a debtor co-owns property with someone else, to divide the debtor’s interest in the property. 
  • A creditor filing an adversary proceeding to object to the discharge of a specific debt.
  • A student loan borrower filing an adversary proceeding against their lender to obtain discharge.

What can I expect during an adversary proceeding? 

Here are the main stages of an adversary proceeding: 

  • The plaintiff files a complaint. This is where the plaintiff asks the court to do something, and makes their case as to why the court should do it.
  • The defendant files and serves a written response to the complaint. This is an opportunity for the defendant to make their case. If the defendant does not file a response within a specific time period, the court will issue a default judgment in the filing party’s favor.
  • A series of pre-trial hearings and conferences takes place. This involves “discovery,” which could include depositions, interrogatories, and other litigation tools used to gather information, as well as potential mediation and settlement conversations between the parties.
  • The parties may reach a settlement, or the case may be dismissed.
  • The case goes to trial. If the parties do not reach a settlement agreement and the case is not dismissed, the adversary proceeding proceeds to trial. The trial will follow formal rules of evidence and procedure, and the judge or jury will issue a verdict in favor of one side or the other. 
  • The losing party may appeal. After a case is dismissed or decided by a judge or jury, the losing party has the right to appeal when they believe there was an error in the process.

How do I file an adversary proceeding?

Adversary proceedings are generally the most complicated component of a bankruptcy case. By working with an attorney that is familiar with the Federal Rules of Bankruptcy Procedure, you can greatly improve the prospect of getting full financial relief.

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