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What Is A Bankruptcy Adversary Proceeding?

  • By: Christopher Benson
  • Published: April 5, 2015

An adversary proceeding is a lawsuit filed within a bankruptcy. It’s filed when someone in the process, such as the trustee, the creditors, or the filer, has a complaint with another party to the bankruptcy. It could be because one party thinks another party has violated the rules, or because one party believes they should not be held liable for a debt.

There are a few common types of adversary proceedings in bankruptcy. Some are filed by the person who filed the bankruptcy…some are filed by the bankruptcy trustee…..and some are filed by creditors of the person filing bankruptcy.

  • Fraudulent/preferential transfers. There are multiple variations of this situation. One example is if you transferred property for less than fair value prior to filing your bankruptcy case, your bankruptcy trustee can file an adversarial proceeding on the grounds of fraud.
  • Lien stripping. If you file for Chapter 13 bankruptcy and have more than one loan on your home, you can file an adversary proceeding to have the second loan stripped and treated as an unsecured loan.
  • Dischargeability of debt. A creditor can use the adversary proceeding to prevent the discharge of debt if they have proof it was incurred fraudulently.
  • Sale of jointly owned property. If you own joint property with another individual, your bankruptcy trustee can use the adversary proceeding to force the sale of your interest in the property in order to get more cash for your creditors.
  • Objection to discharge. If a creditor or your trustee believe any aspect of your case involves fraud, they can object to the discharge of a particular debt or your entire case.

Over the past 27 years, the Law Offices of Christopher A. Benson has helped over 2,300 of Washington clients take control of their financial situation. We can stop your garnishment and change your monthly payments for all your combined unsecured debt, and if you have had more than $600 garnished within the last 90 days, we can get all of the money back in most cases. But you have to act quickly–call (253) 815-6940 for your free consultation, or email us today. Evening and weekend appointments available.

Christopher Benson

About the Author Chris served on the Board of Directors for Habitat for Humanity
Seattle/S. King County for 10 years and served as Vice President
of the organization during part of that time. Read More