Bankruptcy can be very contested and when there is a contested matters, it gives rise to complaint which needs to be adjudicated by bankruptcy court. Contested matters, if they are smaller in nature, can be handled by motion. There is no fee required for motion and a quick hearing can be done by the bankruptcy judge. However, if the contested matters is serious, it can be adjudicated via filing of an adversary proceedings. An adversary proceeding is a separate civil proceeding within the bankruptcy proceeding. Here, the plaintiff files a separate complaint, along with a filing fee, and serves the named defendant via summons and service of summons executed and filed with the court. The responding party or the defendant responds via an answer. The proceedings results in a judgment which can be entered and executed against the losing party. Again, adversary proceedings are handled much more formally and modeled on the federal rules of civil procedure.
How many types of Adversary Proceedings?
Rule 7001 handles matters regarding adversary proceedings. Any proceeding to recover money or property requires filing of an adversary proceeding.
– Any proceeding to decide the validity, priority, or extent of either a lien or some other interest in property requires an adversary proceeding.
– Any attempt to either have the debtor denied a discharge or have the debtor’s discharge revoked requires an adversary proceeding.
– Any attempt to obtain approval to involuntarily sell the interests of both the debtor and a non-debtor co-owner in property free and clear of the co-owner’s interest requires an adversary proceedings.
– Any proceedings to determine whether a debt is dischargeable requires filing of an adversary proceeding.
– A proceeding to obtain a declaratory judgment with respect to any of the matters which goes to the core of bankruptcy requires filing of an adversary proceeding.
One can say that an adversary proceeding is inherent in a trial. It is a civil litigation conducted within the context of a bankruptcy case. An adversary proceeding is commenced with the filing of a complaint. The complaint must be accompanied by a filing fee.
The Summons and Other Pleadings The summons are issued by the clerk and the plaintiff is required to serve the summons issued by the clerk and a copy of the complaint shall be served on all the defendants. The summons must be served or mailed within 14 days of the time it is issued or a new summons must be obtained.
The Answer in an adversary proceedings should be ready in the same way as an answer in any other federal civil proceedings.