What is a Bankruptcy Adversary Proceeding?

If you are planning to file for bankruptcy and to seek a discharge of your student loan debt, or if you suspect one or more creditors might contest a discharge of certain debts you currently hold, it is essential to learn more about what an adversary proceeding involves and how it functions in a bankruptcy case. Not all bankruptcy cases involve adversary proceedings — they only happen in some cases, and they essentially run parallel to the bankruptcy process. Our West Palm Beach bankruptcy attorneys can explain in more detail.

What is an Adversary Proceeding?

In the context of a bankruptcy filing, an adversary proceeding is, in effect, a separate lawsuit that is connected to the bankruptcy case but is conducted separately from the bankruptcy case. You can think of an adversary proceeding as a case related to your bankruptcy filing that will run parallel to the bankruptcy process.

Adversary proceedings can range in complexity, depending on who filed the adversary proceeding and why. When a debtor files an adversary proceeding in order to ask the court to discharge their educational debt (a situation where an adversary proceeding must be filed), the process is streamlined and straightforward due to a process change that occurred with the US Department of Justice and US Department of Education in late 2022. When a creditor files an adversary proceeding, the proceeding may be significantly more complicated and contentious.

Who Can File an Adversary Proceeding?

An adversary proceeding can be filed by the debtor, a creditor, or by the trustee. When is an adversary proceeding typically filed? In short, whenever there is an issue that cannot be resolved through the bankruptcy process itself, an adversary proceeding may be necessary. For example as we noted above, a debtor must file an adversary proceeding to have student loans discharged. A creditor might file an adversary proceeding to object to a discharge, for instance.

A creditor or the trustee might file an adversary proceeding to object to the discharge of a debt, but this is not a common practice. Such filings of adversary proceedings typically only occur when there are issues of fraud. Otherwise, you will likely not need to worry about a creditor or the trustee filing an adversary proceeding in your bankruptcy case.

Contact Our West Palm Beach Bankruptcy Lawyers Today

Are you anticipating that you will need to file an adversary proceeding in your bankruptcy case because you want to have your student loans discharged? Or do you have reason to expect an adversary proceeding in your bankruptcy case for another reason? Whether you have questions or simply need assistance with your bankruptcy filing and any concurrent adversary proceeding, an experienced West Palm Beach bankruptcy attorney at Kelley, Fulton, Kaplan & Eller can assist you. Do not hesitate to reach out to our firm to learn more about the services we provide to debtors seeking to have their student loans discharged through bankruptcy, and to bankruptcy filers in complex cases. Contact Kelley, Fulton, Kaplan & Eller today for more information about how we can help with your South Florida bankruptcy case.

Source:

law.cornell.edu/uscode/text/11