Who can file an adversary proceeding?

The rules governing bankruptcy are a combination of both state and federal laws. Once an individual files a bankruptcy petition, they are granted an automatic stay by the federal court. This means that any creditor is precluded from taking any type of adverse action against the debtor while the proceeding is underway. An adversary proceeding may occur when the petitioner incurs debts that may be construed as fraud or non-dischargeable in bankruptcy.

Fighting it Out With the Bankruptcy Court

Individuals who choose to file for Chapter 7 bankruptcy can have nearly all of their unsecured debts wiped out. An adversary proceeding may be brought by the Trustee assigned to the case, the creditor or even the person filing for bankruptcy protection. A creditor who files an adversary proceeding may argue that the debt which is owed should not be allowed for discharge because the petitioner obtained a large cash advance on their credit card just days before filing their petition.  A trustee may argue that the schedules were not filled out properly or were fraudulent in nature. The actual petitioner may file an adversary proceeding against their creditor if they violated the federal U.S. bankruptcy code in conjunction with the automatic stay.

Getting Legal Help From a Bankruptcy Expert

The old saying that an attorney who represents him or herself has a “fool for a client”. This is never truer when it comes to bankruptcy law. Each year, states enact a variety of laws governing who can file for bankruptcy and what assets they can keep. When you hire an experienced bankruptcy lawyer, their job is to assist you in keeping most of your assets while either discharging your debts or renegotiating a payment schedule.