Contested Matters, Adversary Proceedings in Bankruptcy

Bankruptcy litigation is complex, difficult and very mechanical. When debtors are tempted by cheap bankruptcy attorneys are paralegal, they are prone to make many mistakes which may give rise to many litigation. Again, these quickie attorneys would not help clients in any forthcoming litigation. Here, in this blog we are writing about contested matters and adversary proceedings. These information is basic and not meant to give specialized legal knowledge for the debtor to do their own litigation. As usual, we always suggest hiring a Nevada licensed attorney and reputable law office including the Law Office of Malik W. Ahmad. Contested matters are short version of adversary proceedings and are resolved summarily than other federal proceedings in bankruptcy. They are handled by motion.Many hot button issues in bankruptcy litigation are handled by adversary proceedings. It is a separate civil proceedings within a bankruptcy proceedings. It cannot be filed without a bankruptcy proceedings. This adversary proceedings is given a separate docket and also in captions handled differently. Again, the proceedings may result in separate judgment in favor of the prevailing party. These proceedings are handled in more formal way than anything else.

How many types of adversary proceedings?
Rule 7001 can highlight more on adversary proceedings. However, the following are always an adversary proceedings.

– Any proceedings to recover money or property brought by a trustee or compel the debtor to turnover the property to the trustee.
– Any proceeding to determine the validity, priority, or extent a lien or some other interest in property.
– Any attempt to obtain approval to involuntarily sell the interests of both the debtor a non-debtor co-owner in property free and clear of the co-owner’s interest.
– Any attempt to either have the debtor denied a discharge or have the debtor’s interest.
– Any attempt to either have the debtor denied a discharge or have the debtor’s discharge revoked.
– Any attempt to have the confirmation of a chapter 11, 12, or 13 revoked.
– Any proceeding to determine whether or not a debt is dischargeable.
– Any proceedings to obtain an injunction or equitable relief.
– A proceeding to subordinate a claim or interest on any ground.
– Any time a civil proceeding is removed from some other court to the bankruptcy court, the removed proceeding is to be resolved as an adversary proceeding regardless of the nature of the dispute.

Again, an adversary proceeding is literally a trial within a case. You may call it a civil proceeding within the context of a bankruptcy case. It is commenced by the filing of a complaint. It also requires a fee. Until few months, the fee for filing an adversary proceeding was $250. There are summons required accompanied with an adversary proceedings but the execution of service is relaxed. The summons must be served or mailed within 14 days. Time in adversary proceeding is computed under Bankruptcy Rule 9006. The defendant has 30 days from the date of the issuance of the summons to file responsive pleading in an adversary proceedings. Answers in an adversary proceedings should be prepared in the same way as an answer in any other federal civil proceedings. The trial of adversary proceedings is no different than other federal civil trials. Summary proceedings are also the same like any other federal case. Finally, if a dispute in bankruptcy case is not an adversary proceedings, it is a contested matter.


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