Featured News 2013 Adversary Proceedings in Bankruptcies

Adversary Proceedings in Bankruptcies

Adversary proceedings in bankruptcy are lawsuits which are typically filed by your creditors when they don't get the finances that they expected. Normally, creditors are not allowed to sue or take any legal action in the midst of a bankruptcy procedure, but adversary proceedings allow for a lawsuit under very specific circumstances.

While any adversary proceedings are technically apart of your bankruptcy, they will have their own separate case number. In some cases, you may want to hire a separate attorney to handle your adversary proceedings, as your bankruptcy lawyer may already be swamped with the logistics of your bankruptcy procedure and may not have time to represent you in the lawsuits.

Any party can file an adversary proceeding in a bankruptcy, including a trustee or a creditor. Even you can file for an adversary proceeding if you need relief and need a judge's approval to get the action that you need. Your case cannot be accomplished through a court motion, which is why the adversary proceeding is so important. Normally, these proceedings begin when a person who is suing files a complaint with the bankruptcy court.

The complaint can come from any side and be about any subject that pertains to the bankruptcy. Normally in an adversary proceeding, the plaintiff will go to a judge and explain the issue. Then, if the judge sees that there needs to be legal action taken, he or she will allow the court to issue a summons. The plaintiff will then need to serve this summons to the person who is being sued along with a copy of the complaint.

Most of the time, the person who was served the summons has a specific amount of time to respond. If this defendant doesn't respond appropriately or promptly, then the court can enter a default and the plaintiff will receive a default judgment. There are a variety of different adversary proceedings that you could encounter during your case. One of the most common reasons that individuals file adversary proceedings is because of fraudulent transfers.

The bankruptcy trustees can file a fraudulent transfer adversary complaint if you transferred property or money to another individual within the two years before you filed for bankruptcy. Sometimes trustees can prove that this was fraudulent and was a way that the filer wanted to circumvent bankruptcy proceedings with that specific amount of money. Other times, filers will start an adversary proceeding if they believe that there has been a preferential transfer.

This is a transfer that happens when the filer pays a creditor more than $600 within 90 days before filing for bankruptcy. A trustee who notices that this tool place will need to prove that he or she was insolvent at the time of the transfer and that nothing was received in return for the payments. The trustee must also prove that the transfer would have given the creditor more than he or she would have received in a Chapter 7 Bankruptcy.

Sometimes adversary proceedings also involve dischargeablity of debt. This happens when a creditor files an adversary complaint and requests that the court does not discharge the debt from that creditor. Typically this happens when you incurred the debt fraudulently. Sometimes individuals can also file an objection to discharge that will claim you have failed to comply with court orders and therefore don't deserve the discharge.

Another reason for adversary proceedings is lien stripping. This normally happens in a Chapter 13 bankruptcy and happens when you have more than one mortgage on a house. The adversary proceedings can request that you strip the liens or second mortgages on that property. This request is only honored when the value of the first mortgage is higher than the value of the actual property. If you want more information about bankruptcy and adversary proceedings, then you need to talk with a local bankruptcy attorney today for more information.

Related News:

Seniors Can Use Bankruptcy to Protect Assets

We can't ignore the fact that the retirement climate isn't exactly stable for seniors. While some people's careers have enabled them to have a cushy retirement, that's not the case for ...
Read More »

Your Car and Your Chapter 7 Bankruptcy

When people file for bankruptcy, one of their primary concerns is typically their car. If you have spent your money on a vehicle which has become a prized possession for you, chances are that you ...
Read More »

CDC Reports Medical Bills are a Burden for 1 in 4 Families

Medical care can be overwhelmingly expensive, but when a family member is ill it is often mandatory. In many circumstances, it is impossible for an individual to avoid paying medical bills because the ...
Read More »