What is an Adversary Proceeding?
An Adversary Proceeding (AP) is a lawsuit arising in or related to a bankruptcy case. The filer is the “plaintiff” and the party against whom the AP is filed is the”defendant”. An Adversary Proceeding is initiated by filing with the Bankruptcy Court a document called a “complaint”. Such filings serve to resolve both Federal and State issues. A separate case number is assigned to each Adversary Proceeding.
Certain types of disputes cannot be handled by motion in the bankruptcy case, but instead require the filing of an Adversary Proceeding. Adversary Proceedings are filed pursuant to Bankruptcy Rule 7001. The Federal Rules of Bankruptcy and the Local Bankruptcy Rules state which actions require the filing of an Adversary Proceeding.
Because Adversary Proceedings may be extremely complex, you are strongly encouraged to consult with a bankruptcy attorney. An Adversary proceeding is litigated like other complaints/civil matters which involve, depositions, discovery, interrogatories, pre-trial conferences and perhaps a trial.
Who are the Plaintiff’s of an Adversary Proceeding:
Any creditor, trustee or interested party may file an adversary if there is a concern or question of fraud or illegal transference of property by the Debtor.
How much are the Court fees for filing an Adversary Proceeding?
Defending an adversary depends on the complexity of the case and may range from a flat fee of $1,000 to hourly fees of $200.00.
Why is the bankruptcy case closed if my adversary case is still going on?
The court does not necessarily lose jurisdiction to hear disputes simply because the bankruptcy case has been administratively closed. A Chapter 7 debtor can be discharged and the case closed while a Section 523 complaint is pending because the discharge will not apply to those debts for which a Section 523 complaint is granted in favor of the plaintiff.