Adversary Proceedings

JC Law Group PC represents clients in bankruptcy litigation cases including Adversary Proceedings and Contested Matters.

Adversary Proceedings

An adversary proceeding is essentially a separate lawsuit brought within the bankruptcy court in connection to an existing case.  If you are a creditor bringing the adversary proceeding, you pay a filing fee and get a new case number just like filing any lawsuit.  Debtors can also bring an adversary proceeding (there is no filing fee for debtors).  There are many reasons you may file an adversary proceeding, including to:

  • recover certain types of property
  • determine the validity and extent of certain liens
  • object to or revoke a debtor’s discharge
  • revoke a confirmed plan
  • determine dischargeability of debt

There are other adversary proceedings, but these are some of the more common reasons such lawsuits are initiated.  An adversary proceeding is like most lawsuits; parties can exchange written discovery, take depositions, and take a case to trial.

Contested Matters

Contested matters involve disputes or requests that do not fall under adversary proceedings. They are resolved by motion, meaning a party files a request in the existing bankruptcy case, asking the judge to resolve a particular issue.  The scope of contested matters is quite large, but some of the common issues involve:

  • motions to dismiss Chapter 7 for abuse or under “the totality of the circumstances”
  • motions to dismiss Chapter 13 cases for a variety of compliance issues
  • valuing or “stripping” a lien in Chapter 13
  • relief from stay, where a creditor wants to foreclose on a home or proceed with other actions against a debtor, or his or her property
  • taking or protecting property

Should You Litigate?

Sometimes litigation is a good thing.  For example, you may initiate litigation to remove the second mortgage on your home or recover money garnished from you in the 90 days before you filed bankruptcy.

Sometimes you have no choice.  You may find yourself on the receiving end of litigation started by a trustee, creditor or the United States Trustee.  Maybe an aggressive creditor followed you into bankruptcy and sued you to disqualify you as ineligible, or alleged fraud, misrepresentation or other allegations that place your bankruptcy and fresh start in jeopardy. In order to get discharge in bankruptcy, you may have to fight this creditor.

Whether to fight something in bankruptcy court requires evaluating your goals, and measuring the costs and risks. We enjoy this challenging part of bankruptcy practice and we can help you through this.

If you are a creditor considering bringing an adversary proceeding in bankruptcy or a debtor facing bankruptcy litigation, please call us at (415) 963-4004 to schedule a consultation. We represent clients in San Francisco, Oakland and San Jose bankruptcy courts.