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.