An adversary case occurs when a debtor sues or is sued by another party in bankruptcy court. This is essentially a lawsuit related to the debtor’s bankruptcy case but treated as an independent legal action that is handled more like a regular court proceeding.
As a Baltimore bankrupty lawyer , I have helped debtors file adversary cases for a variety of reasons such as to recover 90 day garnishment funds, seeks relief for violations of the automatic stay or determine the dischargeability of student loans.
Creditors will file adversary proceedings to argue a particular debt should not be discharged in bankruptcy. For example, as a Baltimore bankruptcy lawyer, I have see creditors argue that the debt was created through fraud, willful or malicious injury, or a personal injury caused by drunk driving and therefore not dischargeable.
It also possible for the chapter 7/13 trustee or the United States Trustee. Trustee’s usually file adversaries to go after an asset. This may be to compel debtor to handover an asset that is not exempt or the trustee may be trying to undo a transfer of an asset from the debtor to another party right before the bankruptcy case was filed.
The United States Trustee job is to promote and protect the integrity of the bankruptcy process. Therefore, if it feels the debtor is abusing the bankruptcy process it may file an adversary requesting the debtor to convert from a Chapter 7 to Chapter 13 or even move to dismiss the case.
This is a brief introduction to a complex area of the bankruptcy law and a consultation with a knowledgeable bankruptcy lawyer is advised.
Joseph K. Githuku
Baltimore bankruptcy lawyer
Maryland bankruptcy lawyer.