Often simply called an AP in bankruptcy lingo, an Adversary Proceeding is a lawsuit that is filed separately but in relation to a bankruptcy case and resembles a typical civil case. In an adversary proceeding is typically a creditor, trustee, or debtor suing another party over a dischargeability of debt, preference payment, violation of automatic stay, or a fraudulent transfer issue.
Some examples of adversary proceedings in a typical bankruptcy case might include a creditor charging a debtor with making a fraudulent claim to discharge a debt. Another example might include a bankruptcy attorney filing an adversary proceeding in an effort to strip junior liens on a client’s real estate holdings. The plaintiff in an adversary proceeding is responsible for paying a filing fee as it must be filed with the clerk’s office. Additionally, after a complaint is filed, a summons must be served to the defendant just as with a normal civil lawsuit.
Sometimes a contested matter is confused with an adversary proceeding which is much more of a formal procedure. When an individual files for bankruptcy, there is a change that you may find yourself being served with an adversary proceedings notice or you may file one yourself. If you fail to comply with any part of a complaint, negative consequences could result including having your entire bankruptcy case dismissed and/or having a judgment entered against you if you are the defendant. Only the trusted advice of a Dayton bankruptcy attorney is a for sure way of knowing with confidence of how to proceed.