An adversary proceeding in bankruptcy is a type of lawsuit in the

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legal system. It is distinguished from other suits by being filed a

United States bankruptcy court United States bankruptcy courts are courts created under Article I of the United States Constitution. The current system of bankruptcy courts was created by the United States Congress in 1978, effective April 1, 1984. United States bankruptcy c ...

in connection with a larger bankruptcy proceeding.

Procedure

Adversary proceedings are governed by certain court rules found in Part VII of the

Federal Rules of Bankruptcy Procedure The Federal Rules of Bankruptcy Procedure (abbreviated Fed. R. Bankr. P. or FRBP) are a set of rules promulgated by the Supreme Court of the United States under the Rules Enabling Act, directing procedures in the United States bankruptcy courts. ...

and, in part, by the Federal Rules of Civil Procedure. A bankruptcy case may contain one or more adversary proceedings or (most commonly) none at all. Other than their connection to a bankruptcy proceeding, adversary proceedings are largely similar to a standard lawsuit in federal district court. The suit is opened by a complaint filed with the Bankruptcy Court, and proceeds through the same stages of litigation, including

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and

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(including

jury trial A jury trial, or trial by jury, is a legal proceeding in which a jury makes a decision or findings of fact. It is distinguished from a bench trial in which a judge or panel of judges makes all decisions. Jury trials are used in a significan ...

in appropriate cases). The adversary proceeding may address claims to do with

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or state law, or in rare cases other law, as well. The only limitation is that the suit must have some bearing on the liabilities or assets of the bankrupt debtor or the debtor's discharge. Adversary proceedings may be filed by the bankruptcy trustee or by other parties. For example, a creditor may file an adversary proceeding to object to the debtor's discharge. Or, a debtor may commence an adversary proceeding against a creditor as a response to a violation of the

automatic stay In United States bankruptcy law, an automatic stay is an automatic injunction that halts actions by creditors, with certain exceptions, to collect debts from a debtor who has declared bankruptcy. Under section 362 of the United States Bankruptcy ...

. Very commonly, the debtor-in-possession in a

Chapter 11 Chapter 11 of the United States Bankruptcy Code (Title 11 of the United States Code) permits reorganization under the bankruptcy laws of the United States. Such reorganization, known as Chapter 11 bankruptcy, is available to every business, wheth ...

reorganization of a business debtor will initiate adversary proceedings against a party with whom the debtor had an executory contract, against whom it had a claim in

tort A tort is a civil wrong that causes a claimant to suffer loss or harm, resulting in legal liability for the person who commits the tortious act. Tort law can be contrasted with criminal law, which deals with criminal wrongs that are punishable ...

, or to whom it made a preferential transfer prior to filing for bankruptcy, intending to collect funds to maximize working assets. An adversary proceeding is more formal than a contested matter. A contested matter in bankruptcy is governed by Rul
9014
of the Federal Rules of Bankruptcy Procedure. A debtor can attempt to discharge student loans through bankruptcy by use of the adversary proceeding."Bankrupt your student loans and other discharge strategies," by Chuck Stewart, Ph.D., . June 2006.

References

External links

Mobile-friendly edition of the Federal Rules of Bankruptcy Procedure
(www.federalrulesofbankruptcyprocedure.org) {{US-law-stub United States bankruptcy law Lawsuits

Procedure

See also

References

External links