Adversary Proceedings in Jupiter

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.