Bankruptcy cases can be complex, lengthy, and costly. There are many factors that must be considered, and individuals must provide extensive information related to their finances in order to file a successful bankruptcy claim.

Adversary proceedings further complicate bankruptcy cases. These involve lawsuits filed by a creditor or trustee.

Facing legal claims can make the process even more difficult. Understanding how adversary proceedings work and consulting with an experienced legal professional will ensure that your legal rights and financial interests are protected.


How Adversary Proceedings in Bankruptcy Work

In most bankruptcy cases, individuals complete the process without facing any additional lawsuits. But in others, creditors can seek to challenge you regarding specific debts and their dischargeability.

Creditors must go through the proper legal channels to file an adversary proceeding. This consists of paying a fee and obtaining a case number for the new lawsuit.

Individuals filing for bankruptcy can face charges of fraud from creditors or trustees. The sale or transfer of assets prior to the bankruptcy proceedings may trigger a lawsuit from another party.


The Adversary Proceedings Process

Once a plaintiff files a lawsuit within your bankruptcy proceedings, a summons will be issued and must be served to the defendant.

If you’re facing adversary proceedings, you may have received a copy of the complaint listing all of the information related to the lawsuit.

Once you’ve received the complaint, you need to respond in a timely manner. Bankruptcy rules will depend on your location, so consulting with an attorney will prevent issues that could cost you in the long run.

Failing to file a response within the required time period could result in a default judgment against you.

In addition to debt dischargeability issues and possible fraud, preferential transfers, lien stripping, and the sale of jointly owned property can all result in adversary proceedings.


The Legal Protection You Need When Facing Adversary Proceedings in Bankruptcy

Seeking the help of a legal professional is the first step to protecting your rights against an adversary proceeding.

Your attorney can help you determine the validity of the charges being made against you while determining the best options for your needs.

Legal action may be required to fight creditors or trustees. You’ll need to show that you’re eligible for bankruptcy and haven’t misrepresented your case or participated in fraudulent activities.

More importantly, you need to carefully consider the time and financial resources that will be required in an adversary proceeding.

The process can be complex, and understanding what will be required prevents unnecessary losses or expense.

Creditors must prove that certain debts cannot be discharged such as taxes related to income and trust funds. Student loan debts may not be discharged unless you can demonstrate that they present an “undue” financial burden.

If a creditor can prove that a specific debt can’t be discharged, you may end having to continue to satisfy your obligation to them.

Not all attorneys have the expertise or experience in working with adversary proceedings.

Choosing the right attorney improves the likelihood of achieving the outcome you need to protect your interests and establish a fresh financial start for the future.