An adversary proceeding in a bankruptcy case is a lawsuit filed in the case that is typically objecting to the discharge of a debt in the bankruptcy petition. 11 USC § 523 sets forth that a debt may not be subject to discharge if it is a result of willful and malicious injury, fraud on the part of a fiduciary or actual fraud.
Most Chapter 7 and Chapter 13 bankruptcy petitions are filed and move through to discharge without the filing of an adversary proceeding. However, sometimes a creditor believes that it is legally entitled to the denial of a discharge for a specific debt and files a complaint for an adversary proceeding.
Adversary proceedings are much more similar to a civil proceeding than a bankruptcy case in that there is a complaint, a response to the complaint (answer, motion to dismiss, etc.), pre-trial conference, summary judgment motions can be filed and ultimately the case is set for trial. Unless the parties reach an agreement prior to the trial, the bankruptcy judge will hear evidence from the parties and reach a decision regarding the dischargeability of a debt. Adversary proceedings typically take quite a bit longer than the typical Chapter 7 bankruptcy case.
In addition, attorneys typically charge by the hour for representation on either side of an adversary proceeding instead of a flat fee as is often used in Chapter 13 or Chapter 7 representation. The bottom line is that adversary proceedings are expensive for the litigants because they take quite a bit of time and require the attorney to have knowledge of both litigation and bankruptcy law. As a result, adversary proceedings typically involve a large sum of money be at issue before it makes sense to file the complaint.
Erika Singler has represented both creditors and debtors in adversary proceedings before the Bankruptcy Court for the Southern District of Indiana, Indianapolis division. If you are a creditor that has received notice of the filing of a bankruptcy petition and you would like to discuss the filing of an adversary proceeding do not delay. There is a strict deadline by which you must file your complaint or it will be waived forever. If you are a debtor and an adversary proceeding has been filed against you, first speak to your bankruptcy attorney. If you bankruptcy attorney is willing to represent you in the adversary proceeding, that probably makes the most sense. Nonetheless, if you are in need of an attorney to represent you on either side of a bankruptcy adversary proceeding do not hesitate to contact Halcomb Singler, LLP for an appointment at (317) 575-8222. Please note, unlike initial consultations regarding bankruptcy filings, there is a consultation fee for all meetings regarding adversary proceeding representation of $200.00 due at the time of the consultation.
**Halcomb Singler, LLP, is a debt relief agency. It helps people file for bankruptcy under the bankruptcy code. No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so. The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.