When you file bankruptcy, either you or a creditor may still need to file a lawsuit and have a bankruptcy judge determine the results. You and the other person are adversaries. Adversary proceedings are when you need to continue to fight it out in bankruptcy court, and the result will effect the bankruptcy. Adversary proceedings are separately filed lawsuits which relate to the bankruptcy case. Common adversary proceedings that can be heard by a bankruptcy judge in Chapter 7 and 13 include:

  • You bought a Rolex watch a week before you filed bankruptcy and the credit card wants you to pay for the watch even though you filed bankruptcy because you knew you were filing bankruptcy when you bought the watch. (Contesting your discharge.)
  • A lender or collector continues to attempt collections after the case is filed in contempt of the bankruptcy stay or discharge orders. Contempt of the stay is far more serious than a violation of the discharge order after the case has been administered by the judge. Contempt of the stay also effects the judge and the trustee. Violating the discharge only harms the debtor. (Contempt of Court.)
  • You need to determine whether a student loan or income tax debt is going to be dischargeable and an adversary proceeding will make certain it is discharged. With a student loan, you are getting a judge to determine that if you had to pay the debt, it would be an undue hardship. With an income tax debt, you are seeking a determination that the tax return was filed on time with no fraud or effort to evade the tax. (Determination of dischargeability.)
  • You need to strip the second mortgage, and the mortgage company or you want a full trial on that issue. (Determination of the status of a lien).
  • You sold the 100,000 Mercedes to your mother just before filing. (Fraudulent and preferential transfers.)


While most issues in bankruptcy court are primarily just an accounting matter, some issues have to be decided by more than a motion. There will be a complaint, answer, discovery and often a trial. In these circumstances when it becomes proper to have a trial, you have to resort to an adversary proceeding.

How are Chapter 7 and 13 adversary proceedings filed

Every adversary proceeding is related to the main bankruptcy case. Someone files the complaint, and another party or parties defend the case with an answer. The court clerk assigns this case a different case number, but the main bankruptcy case number is also listed in the caption of anything filed in this adversary proceeding.

Each adversary case must pay a filing fee unless there is an exception such as the debtor determining the dischargeability of a debt. A summons must be issued, and the defendant has to be served with the complaint and cover sheet. Some of the necessary parts of the adversary complaint include.

  • The case has to have a caption which identifies the parties, the main bankruptcy case and which bankruptcy court the case is in.


  • The Facts and allegations of the case need to be set forth


  • The reason for that bankruptcy court to have the decision and jurisdiction over the matter.


  • What relief you want from the court.


Less than one in a hundred of our bankruptcy cases involve an adversary proceeding. The attorney should plan a case so adversary proceedings can be avoided. However, the attorney cannot avoid the behavior of a creditor who is determined to violate a stay. In cases like that he will have to sue the bank.

The Three Common Types of Adversary Proceedings

These three types of adversary proceedings are most common:

Creditor Proceedings

If a creditor is attempting to avoid having his debt discharged he must object to the discharge and file an adversary proceeding within 60 days after the first date set for the 341 hearing. See FRBP 4007. A creditor or trustee can ask for an extension of the deadline. Often if the Trustee or creditor asks for an extension they are not sure whether the case should be filed. They may do a 2004 deposition and ask questions to determine first if filing a case would be property.

The Creditor has to be cautious in filing an adversary proceeding to determine the dischargeability of a consumer debt. The failure to win means the creditor has to pay actual damages to the debtor plus often the debtor’s attorney fees and possibly punitive damages. The reasons for not discharging a debt are set out in 11 USC 523. The most commonly used reason is fraud but fraud is hard to prove. One of these sections does imply fraud if the charges were made just before filing. Creditors rarely object to a discharge and the penalty under this section only means you have to pay the debt.

If a Creditor fails to object to a discharge of his debt, his debt will be automatically discharged. However, debts that are not normally discharged under 523 such as child support, alimony, student loans and debts to the federal government do not have to file objections to a discharge. Other creditors such as a credit card, medical debt or victim of a traffic accident are discharged.

Trustee Adversary proceedings

The US Trustee can file an adversary proceeding but their most common duty is to insure petitions are accurate or to make sure persons with high incomes repay creditors. The US Trustee has sued creditors for unfair tactics.

The Chapter 7 trustee will sue in an adversary proceeding most often to recover money from fraudulent or preferential transfers. The Chapter 13 Trustee can also file motions or adversary proceedings to insure the bankruptcy process is not abused.

Debtor Adversary Proceedings

Most importantly the Debtor can file an adversary proceeding against a creditor or Trustee to insure the debtor properly discharges a debt. The debtor does not have to pay a filing fee to determine the dischargeability of any debt. About 500 cases a year are filed by debtors to determine the dischargeability of student loans and about 250 or half of the people win. I would estimate less than that are filed against the IRS to determine if an income tax debt is dischargeable.

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