Who may file an Adversary Proceeding?

Adversary proceeding refers to a lawsuit related to bankruptcy case. It may be filed by a debtor, creditor, bankruptcy trustee, or U.S. trustee. The creditor may file this lawsuit if a debtor seeks to discharge a debt that falls under the exception to discharge. Debts exempted from discharge include debt through fraud, willful or malicious injury, or personal injury due to driving under the influence. The creditor can also file this lawsuit if he believes that the debtor is filing for bankruptcy in bad faith such as if the debtor is only filing for Chapter 7 bankruptcy just to have automatic stay on the properties and not because of his inability to make repayments. A trustee, whether bankruptcy trustee or U.S. trustee, may also file adversary proceeding against the debtor or creditor. This can be done in the grounds of incorrect filling out of schedules or fraudulent entries in schedules. If the trustee believes that the bankruptcy petition is in bad faith or is done to abuse the bankruptcy system, he/she can also file for this lawsuit to have the case dismissed or to force the debtor to take on a Chapter 13 bankruptcy instead of Chapter 7.

The debtor also has the right to file this lawsuit against the creditor if the creditor seeks to collect payment or repossess items while the automatic stay is in place or after the debts have already been discharged. If you wish to file this lawsuit, you need to submit an accomplished Form 104 or the Adversary Proceeding Cover Sheet, which can be filed electronically through the Case Management/Electronic Case Files of the court.