Adversary Proceedings in Jupiter

Bankruptcy is typically an administrative process, so most debtors never even see the inside of a courtroom during their bankruptcy case, unless their situation requires court approval of a payment plan or attendance at a Meeting of Creditors at the courthouse. However, trial litigation does arise during a bankruptcy case if a creditor disputes the dischargeability of a debt or alleges fraud on the part of the debtor.

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40 Years of Experience Litigating in Palm Beach County

Bankruptcy proceedings are similar to litigation in civil court, so having the experience of an experienced adversary proceedings attorney on your side is critical to successfully prosecuting or defending a disputed matter in bankruptcy court. As a seasoned individual and business bankruptcy attorney, Jupiter bankruptcy litigation lawyer Julianne Frank, Esq. has the knowledge and skill to represent debtors and creditors alike in the full range of adversary proceedings in the United States Bankruptcy Court for the Southern District of Florida.

What Is an Adversary Proceeding?

An adversary proceeding is a lawsuit arising in or related to a bankruptcy case that begins when a plaintiff files a complaint against one or more defendants in court. Most bankruptcy judges are very strict about procedural rules, so it is advisable to enlist the help of an experienced bankruptcy lawyer to represent the case, because oftentimes individuals can easily lose their case simply on procedural grounds if they do not consult a professional.

There are various types of lawsuits that can arise in a bankruptcy setting, such as bankruptcy trustees bringing actions to recover transfers of money or creditors filing suits to deny a debtor their discharge from debts. In the past, vendors or suppliers have even sued to recover “preference payments,” which are payments from their customers received within a specified period prior to the filing of bankruptcy. Generally, most types of adversary proceedings involve:

  • determining a debt’s discharge or dischargeability (nondischargeability action);
  • determining priority or validity of a lien;
  • recovering money or property;
  • approving sale of debtor property by a co-owner;
  • revoking confirmation of a plan;
  • obtaining an injunction;
  • subordinating a claim;
  • obtaining a declaratory judgment;
  • determining bankruptcy claims removed to a different court under the federal rules of civil procedure.

Adversary proceedings in bankruptcy most closely resemble a civil lawsuit in their form and substance. Note that debts accrued via fraud or that result from willful and malicious injury to person or property are not dischargeable in bankruptcy, though fraud may be alleged by a creditor (e.g., a credit card company) when, for example, a person opened a new account just a few months before filing for bankruptcy. The credit card issuer may allege the debtor intentionally racked up a large amount of charges without intending to pay off the debt and should not be allowed to have that debt discharged, a claim that would have to be proven in court.

What Happens in an Adversary Proceeding?

An adversary proceeding commences when a plaintiff files the following with the court:

  • a signed original complaint;
  • a signed adversary cover sheet;
  • any applicable filing fee.

The complaint details the facts that the plaintiff believes to be true, and the Adversary Proceeding Cover Sheet summarizes basic information on the adversary proceeding. The clerk of court needs a separate cover sheet for each compliant filed to process the adversary proceeding. Keep in mind that adversary proceedings must be brought within 60 days from the Meeting of Creditors, which typically takes place within a month of the filing of the bankruptcy petition. A creditor who fails to file an adversary proceeding or request an extension before the deadline can lose the ability to challenge the dischargeability of the debt. Note that if the judge finds that the creditor was not substantially justified in bringing the action, the creditor may be required to pay the debtor’s attorney’s fees in defending the action.

Following the complaint, the summons is a notice used to inform the defendant of the commencement of the adversary action and the requirement to submit a motion or answer. Be aware that a defendant's failure to respond can be deemed their consent to entry of a judgment by the bankruptcy court and judgment by default may be taken against a defendant for the relief demanded in the complaint. The summons also states the date of a scheduled pre-trial conference on the proceeding. A plaintiff must serve a summons with a copy of the complaint to each of the defendants within 7 days of the issuance of the summons by mail or in person. The defendant will respond to the complaint with an answer, which they must provide to the plaintiff within 30 days after the issuance of the summons.

What Can You Do About Being Sued in Bankruptcy Court?

If you’re being sued in bankruptcy court, your best course of action is to consult a professional. Due to the complicated process and how a simple mistake could cost you, it’s very beneficial to seek the help of an experienced lawyer. They will be able to help you with answering the complaint, defend you against the creditor, and provide you with the legal support you need.

Questions? Speak with Julianne Frank, Esq.

There are many lawyers who file bankruptcy proceedings but actually have very limited or no experience in defending adversary proceedings. If you are thinking of filing bankruptcy, you should inquire your potential lawyer about their experience in adversarial proceedings. (How many have they brought or defended? How many times have they actually gone to trial? What is their success rate?) Almost all bankruptcy court decisions are published or are publicly available for review. You can ask your lawyer to provide you with the court rulings in the last three adversary proceedings that they were involved in. After all, if you had a broken leg, for example, you would want a doctor who has the experience and skill to patch you up without having to pause operation and ship you off to another one to fix their mistakes when they hit a road block.

Julianne Frank, Esq. has extensive experience with adversary proceedings and dedicates her practice to helping individuals and struggling businesses file bankruptcy. If you are prepared to dedicate time to working with Attorney Frank side-by-side on your adversary proceeding, contact her firm immediately for next steps.

Call (561) 220-2528 or reach out to Julianne Frank, Esq. online to learn more about how she can help.

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Julianne Frank Esq. is a skilled and experienced attorney that takes on the most difficult of cases and wins. If you believe you have a case only Julianne can resolve, get in touch today.